RBI Cuts Key Lending Rate Further, Extends Loan Moratorium Till August

[Kool_SRG]

RBI Governor Shaktikanta Das announced a cut in the repo rate by 40 basis points (bps) to 4 per cent

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced a reduction in the repo rate to 4 per cent from the existing 4.4 per cent in a surprise move to support the economy. That marked the second cut in the repo rate - or the key interest rate at which the RBI lends short-term funds to commercial banks - so far this year. The move was aimed at countering the fallout from the ongoing nationwide lockdown to contain the spread of the coronavirus pandemic, which has pushed the economy into a standstill, hurt businesses and landed thousands jobless.

Here are five things to know about this big story:

1. Five members of the Monetary Policy Committee (MPC) voted in favour of rate reduction, RBI Governor Shaktikanta Das said through a video address. 

2. The committee also decided to continue with its "accommodative" stance of policy, which means the central bank is ready to ease monetary policy further to support the financial system.

3. While the repo rate was reduced to 4 per cent, the reverse repo rate - the interest rate at which the RBI borrows funds from commercial banks - was lowered to 3.35 per cent from 3.75 per cent.

4. In his first address to the media after the government detailed the fiscal and monetary stimulus worth Rs 20.97 lakh crore, Mr Das said economic is expected to remain in the negative territory in the current financial year, due to the COVID-19 outbreak.

5. In March, the RBI had slashed the repo rate by 75 bps to stimulate growth, and the next month, it unexpectedly lowered the key deposit rate - or reverse repo rate - to 3.75 per cent, in a bid to discourage commercial banks from parking idle funds with it and spur lending.

[Kool_SRG]

Repo rate reduced by 40 bps to 4%

After an off-cycle meeting of the monetary policy committee over the last three days, MPC voted to reduce repo rate by 40 basis points to from 4.4 percent to 4 percent, said RBI governor Shaktikanta Das. 

"Over the last three days, the MPC reviewed the implications of COVID-19 on economy, it has been decided to reduce in repo rate to revive growth. This will be done by 40 basis points, from 4.4 % to 4%," said RBI chief. 

 

Private consumption impacted most by COVID-19: RBI chief 

The RBI governor Shaktikanta Das said that the biggest blow from COVID-19 has been to private consumption.

Food inflation increased to 8.6% in April 2020: RBI chief 

RBI Governor Shaktikanta Das said that food inflation which had eased from January, 2020, peak in February and March has now surged to 8.6 percent in April. He further said that price of vegetables, oil seeds, and milk emerged as pressure points.

[Kool_SRG]

MPC says inflation to fall below 4% in Q3 and Q4 of FY21: RBI chief

MPC is of the view that inflation in first half of 2020 will be intact but, by 3rd and 4th quarter it may fall below the target of 4 percent in FY21, said the RBI governor on Friday. 

 

GDP growth to remain in negative this year, says RBI chief 

There will be gradual revival of activity and demand by the second half of FY-2021, said RBI governor. He added that gross domestic product will remain in negative territory this year with some pickup in pulses segment. 

 

India's forex reserves increase by Rs 9.2 billion: RBI chief 

Forex reserves stand at $ 487 billion, equivalent of 1 year of imports, said RBI governor Shaktikanta Das. 

[Kool_SRG]

Loan moratorium extended 31 August: RBI governor

The loan moratorium will be extended till 31 August, said RBI governor Shaktikanta Das. This makes it a six month moratorium.

He added that the lending institutions are being permitted to restore the margins for working capital to the origin level by 31 March, 2021.

 

90 days extension to term loans offered to provide greater flexibility of SIDBI: RBI chief 

In order to provide greater flexibility of SIDBI, another 90 days extension for the 90-day term loan facilities will be offered, said RBI governor Shaktikanta Das.

This will provide additional liquidity support to the MSME sector, RBi chief said. 

 

Monetary policy transmission has improved: RBI governor

Monetary policy transmission has improved, said RBI governor Shaktikanta Das. He added that an improvement in passing on a lower rate to borrowers has been noticed across various business segments.

[Kool_SRG]

RBI cuts reverse repo rate to 3.35%

To maintain accommodative stance, the Central Bank has decide to cut reverse repo rate to 3.35 percent, said RBI governor Shaktikanta Das on Friday. 

[JambaKrantu]

It looks like the lockdown has a much more pronounced  effect on India's economy compared to other countries like USA or Italy..

[Android_Halwa]

Just now, JambaKrantu said:

It looks like the lockdown has a much more pronounced  effect on India's economy compared to other countries like USA or Italy..

Lock down has hurt India terribly. 

Don't know if we can ever recover back to the 7% growth levels.

Inflation and rupee devaluation are biggest concerns..

[kr123]

Good decision 

Atleast some relief to people 

[Kool_SRG]

Just now, Android_Halwa said:

Lock down has hurt India terribly. 

Don't know if we can ever recover back to the 7% growth levels.

Inflation and rupee devaluation are biggest concerns..

Mari economy demundi antha open ayyaka malli itte grow ayipothadi annaav ga kaaka

 

#Bekaar muchata..

[snoww]

1 hour ago, JambaKrantu said:

It looks like the lockdown has a much more pronounced  effect on India's economy compared to other countries like USA or Italy..

Major labor crisis going to happen. 

[Android_Halwa]

1 hour ago, Kool_SRG said:

Mari economy demundi antha open ayyaka malli itte grow ayipothadi annaav ga kaaka

 

#Bekaar muchata..

Of course grow ayitadi and there is no doubt it. But does that mean things will become normal like it used to be ? Growing economy and Things coming back to normal are completely different man...confuse avutunav..!! 

take my word...negative growth nundi 4-5% levels ki oka 4-5 quarters lo veltadi. Now, Does that mean things will be back to normal ?

#Bekaar__Muchata

[Sreeven]

3 hours ago, Android_Halwa said:

Of course grow ayitadi and there is no doubt it. But does that mean things will become normal like it used to be ? Growing economy and Things coming back to normal are completely different man...confuse avutunav..!! 

take my word...negative growth nundi 4-5% levels ki oka 4-5 quarters lo veltadi. Now, Does that mean things will be back to normal ?

#Bekaar__Muchata

Naku e road side bandlalo pette businesses dobbedtayemo ani doubt..a businesses chala mandiki upadi..