Live Updates: RBI cuts repo rate by 75 bps

The Reserve Bank of India (RBI) Governor Shaktikanta Das today cut repo rate by 75 bps to 4.4%, stance remains accommodative and reversed repo rate reduced by 90 bps to 4%.

Mar 27, 2020 04:03 IST India Infoline News Service

Shaktikanta Das

The Reserve Bank of India (RBI) Governor Shaktikanta Das today cut repo rate by 75 bps to 4.4%, stance remains accommodative and reversed repo rate reduced by 90 bps to 4%. Monetary policy committee voted 4:2 majority, RBI Governor said.

Highlights of the announcement by RBI Governor Shaktikanta Das

  • RBI Governor says, “RBI will continue to remain vigilant and take whatever steps are needed. All instruments conventional and unconventional are on the table.”
  • Last tranche of capital conservation buffer postponed, NDF market has been growing rapidly; bank allowed to deal in NDF market: Shaktikanta Das
  • With today's steps, RBI's liquidity injection stands at 3.2% of GDP. Increase accommodation under MSF from 2% of SLR to 3% with immediate effect.
  • Steps related to TLTRO, CRR, MSF will inject liquidity worth Rs 3.74 trillion.
  • Moratorium on term loans, deferment of interest payment will not result in asset classification downgrade, RBI said.
  • Defer implementation of NSFR to Oct 1, 2020.
  • RBI Governor Shaktikanta Das said liquidity measures will result in total liquidity injection of Rs3.74 lakh cr to the system.
  • All banks including SCB, LAB, SFB, RRBs, NBFCs, HFCs permitted to allow a moratorium of 3-months on payment of instalments as of March 1, 2020.
  • RBI to reduce CRR of all banks by 100 bps to 3% of NTDL at the beginning of March 28 for 1 year at Rs1.37 lakh cr to be released via CRR cut.
  • RBI Governor Shaktikanta says RBI will conduct LTRO of up to 3 year tenor of up to Rs 1 lakh cr at a floating rate linked to the policy repo rate.
  • Projection of growth and inflation will be heavily contingent on the spread and duration of a pandemic. This kind of uncertain outlook never been seen before.
  • Slump in crude oil prices could provide some relief: Governor Das.
  • The need of the hour is to shield the domestic economy from Covid-19 pandemic.
  • Time has come for the RBI to unleash steps to maintain financial stability.
  • Concerns on growth can be reduced by following govt orders.
  • MPC has refrained from giving any growth numbers in wake of Covid-19 led uncertainty.
  • Most of the sectors will be adversely impacted due to Covid-19.
  • The rising probability that global growth will slip into recession.
  • MPC noted that Covid-29 lockdown has led to a standstill of global economic activity.
  • RBI is closely monitoring financial markets and economic situation.
  • Bank's credit flow has been steadily slowing down.
  • MPC noted that Covid-29 lockdown has led to a standstill of global economic activity.
  • RBI is closely monitoring financial markets and economic situation.
  • RBI MPC met on 24, 25, 27 March in the wake of the current economic situation.
After the announcement of a Rs1.07 lakh cr relief package for the poor on March 26 by Finance Minister Nirmala Sitharaman, RBI to hold a press conference today held at 10 AM.

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