RBI announces comprehensive package to tide over economic crisis
To ease financial stress in the market, the central bank announces a slew of measures, including infusing liquidity and 3-month moratorium on term loans
RBI Governor Shaktikanta Das today announced 75 basis points cut in repo rate, effectively taking the repo rate to 4.4% from the earlier 5.15%. Such steps are aimed at addressing the financial stress caused by Covid-19.
Along with this, RBI allowed banks and financial institutions to put a moratorium on term loans. Shaktikanta Das added that the MPC refrained from projecting inflation and growth this time as the situation was too volatile. He said the RBI was maintaining its “accommodative” stance, and would maintain its position “as long as necessary” to revive growth, while ensuring inflation remained within target.
The central bank announced several measures, including special lines of liquidity, loan moratorium, and easier asset quality norms, to help the economy tide over the crisis stemming from the novel coronavirus pandemic.
The RBI also announced a comprehensive package, including measures to expand liquidity, steps to reinforce monetary transmission, efforts to ease financial stress by relaxing repayment and endeavor to improve the functioning of the market. “The world is fighting an invisible assassin,” Das said while he announced a slew of measures, including measures to infuse liquidity and a 3-month moratorium on term loans.
The RBI Governor clarified that the non-payment of EMIs during the moratorium period will not result in asset classification downgrade. Heightened volatility, unprecedented uncertainty and extremely fluid state of affairs, projections of growth and inflation would be heavily contingent on the intensity, spread, and duration of COVID-19, Reserve Bank added.
Courtesy: Financial Express