Mumbai, Mar 27: The Reserve Bank of India (RBI) on Friday lowered the key repo rate by 75 basis points to 4.4 per cent in a bid to arrest the economic slowdown amid coronavirus (COVID-19) outbreak.
The reverse repo rate now stands at 4 per cent, down by 90 basis points, said RBI Governor Shaktikanta Das adding this has been done to make it unattractive for banks to passively deposit funds with the central bank and instead lend it to the productive sectors.
The six-member monetary policy committee (MPC) met on March 24, 25 and 27 and voted 4:2 in favour of the repo rate reduction. The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target.
"The need of the hour is to shield the economy from the pandemic," said Das. "We need to mitigate the impact of coronavirus, revive economic growth and provide financial stability."
Repo rate is the rate at which a country's central bank lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.
The RBI Governor further said that the economic growth and inflation projection will be highly contingent depending on the duration, spread and intensity of the pandemic.
"Global economic activity has come to a near standstill as COVID-19 related lockdowns and social distancing are imposed across a widening swathe of affected countries. Expectations of a shallow recovery in 2020 from 2019's decade low in global growth have been dashed," said Das.
"The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic. There is a rising probability that large parts of the global economy will slip into recession," he said.
However, the RBI has injected liquidity of Rs 2.8 lakh crore via various instruments equal to 1.4 per cent of GDP. "Along with today's measures, liquidity measures equal to 3.2 per cent of GDP. The RBI will take continuous measures to ensure liquidity in the system."
The RBI governor has said that all banking institutions can offer a three-month moratorium on all loans for a period of three months. The RBI has also allowed banks to restructure the working capital cycle for companies without worrying that these will have to be classified as a non-performing asset (NPA).
The three-month moratorium will permit banks to avoid a large onset of NPAs during the 21-day lockdown and keep their books healthy.
Das said banks and other financial institutions should do all they can to keep credit flowing to economic agents facing financial stress on account of the isolation that the virus has imposed.
"Market participants should work with regulators like the RBI and the Securities and Exchange Board of India (SEBI) to ensure the orderly functioning of markets in their role of price discovery and financial intermediation," he said.
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RBI reduces repo rate by 75 basis points to battle COVID-19 impact
News Network
March 27, 2020
PM Modi interacts with Indian envoys abroad, urges them to be alert to developments in fight against COVID-19
News Network
March 30,2020
New Delhi, Mar 30: Prime Minister Narendra Modi on Monday interacted with Indian ambassadors and high commissioners abroad and urged them to remain alert to developments in global efforts against COVID-19 including breakthroughs to help the country's fight against the coronavirus.
External Affairs Minister S Jaishankar and Foreign Secretary Harsh Vardhan Shringla were also present during the interaction through video-conferencing.
"Coming together for India PM interacted with Indian Ambassadors/High Commissioners abroad and urged them to remain alert to developments in global efforts against COVID-19 including breakthroughs to help our national efforts to fight COVID19," External Affairs Ministry spokesperson Raveesh Kumar said in a tweet.
"PM appreciated the efforts of our missions in helping Indians abroad, in particular, students and workers," he added.
The number of positive coronavirus cases in the country stood at 1,071 on Monday. It includes 29 deaths and 99 people, who have been cured of the highly contagious virus.
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'CPM will launch door-to-door campaign to explain link b/w CAA-NPR-NRC'
Agencies
January 19,2020
Thiruvananthapuram, Jan 19: The CPI(M) will soon launch a nation-wide house-to-house campaign to explain to the people, the 'link' between CAA-NPR-NRC, party general secretary, Sitaram Yechury said on Sunday.
The intense campaign will take place all over the country, he said while briefing the media about the three-day central committee held at Vilapilsala near here.
The central committee also urged the people not to answer the NPR questions.
"The Central committee has called upon the people not to answer any questions concerning the NPR when the enumerators come to their houses...," the left leader said.
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COVID-19 may stay till 2021; need aggressive testing: Health experts interact with Rahul Gandhi
Agencies
May 27,2020
Global health experts on Wednesday said novel coronavirus is here to stay for more than a year and called for aggressive testing to prevent its spread.
In an interaction with Congress leader Rahul Gandhi, health experts Professor Ashish Jha and Professor Johan Giesecke talked about the COVID-19 pandemic as part of the series being aired on Congress social media channels.
While Jha exuded confidence that a vaccine will be available in a year's time, Prof Giesecke said India should practice a lockdown that is as 'soft' as possible, as a severe lockdown will ruin its economy very quickly.
"When the economy is opened up after lockdown, you have to create confidence among people," Harvard health expert Ashish Jha told Gandhi.
Jha is a professor of Global Health at TH Chan School of Public Health and Director, Harvard Global Health institute.
He said coronavirus is a '12-18 months' problem and the world is not going to be free of this till 2021.
The expert also called for the need for aggressive testing strategy for high-risk areas.
Gandhi, while interacting with the experts, said life is going to change post COVID-19.
"If 9/11 was a new chapter, this will be a new book," he remarked.
Professor Johan Giesecke, former chief scientist, European Centre for Disease Prevention and Control said India should have a 'soft lockdown'.
"The situation that India is in, I think, you should have a soft lockdown, as soft as possible," he said.
"I think for India, you will ruin your economy very quickly if you have a severe lockdown. It is better, skip the lockdown, take care of the old and the frail...," he noted.
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