Published On : Fri, May 22nd, 2020

Repo Rate Reduced by 40 Basis Points, Announces Governor

NEW DELHI : In his third such address since the coronavirus-induced lockdown began on March 25, Reserve Bank of India (RBI) Governor Shaktikanta Das is now holding a press conference. After the lockdown began, Das had slashed the benchmark interest rate (repo rate) by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown.

Finance Minister Nirmala Sitharaman, who recently announced the ₹20 lakh crore economic package in five tranches, will also hold a review meeting with CEOs of public sector banks (PSBs) today to discuss various issues, including loan disbursement, as part of efforts to revive the economy reeling under the COVID-19 impact.

-Impact of coronavirus turning out to be more than expected

-GDP growth expected to remain in negative category: Shaktikanta Das

-RBI maintains accommodative stance.

-Inflation to remain firm in the first half of 2020 but ease later on.

-A ray of hope comes from the forecast of normal monsoons: Das

-MPC, which met off-cycle, voted in the ratio of 5:1 in favour of the repo rate cut

-RBI MPC cuts repo rate cut by 40 basis points from 4.4 % to 4%. Reverse repo rate stands reduced to 3.35%.

-Repo rate cut by 40 basis points.

-RBI press conference begins.

-Stock markets are flat ahead of the RBI press conference.

-The RBI cut interest rates by a sharper-than-expected 75 basis points in late March. Markets and economists now expecting at least another 75-100 basis points cuts in the remainder of this fiscal year.

-In today’s press conference RBI Governor may again announce new measures to ease liquidity pressure in the banking system and to boost the economy from the coronavirus shock.