{"id":8452,"date":"2020-04-01T12:36:00","date_gmt":"2020-04-01T12:36:00","guid":{"rendered":"\/blog\/?p=8452"},"modified":"2020-05-06T06:54:16","modified_gmt":"2020-05-06T06:54:16","slug":"rbi-cuts-repo-rate-by-75-bps-to-4-40-to-fight-covid-19","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/rbi-regulations\/rbi-cuts-repo-rate-by-75-bps-to-4-40-to-fight-covid-19\/","title":{"rendered":"RBI Cuts Repo Rate by 75 bps to 4.40% to Fight Covid-19"},"content":{"rendered":"\n

Amid the rising pandemic situation of COVID-19\nglobally and the corresponding 21-day lockdown imposed in India, the Indian\neconomy sectors are expected to suffer a huge setback except for agriculture\nand allied activities. Moreover, given the rising intensity, spread and\nduration of the novel coronavirus, there is a huge possibility that many\ncountries of the world, including India, will slip into recession. <\/p>\n\n\n\n

To stir the stationary economy and be prepared for the\nuncertainties, the Reserve Bank of India (RBI), on March 27, announced the\nmuch-anticipated move to cut down the repo rate by 75 bps from 5.15% to a\nmeagre 4.40%. This is done with the intention of keeping the economy liquid and\nfloating. The new repo rate is the lowest till date; previously only in April\n2009, the repo rate was slashed to 4.74% because of the Global Financial\nCrisis. The reduced repo rate will allow commercial banks to borrow more from the\nRBI, which will, in turn, make loans from the commercial banks and other\nfinancial companies such as Tata Capital, cheaper for the general public,\nthereby boosting the economic growth. This will help the RBI control the\nexpected inflation, while simultaneously benefitting the end-consumer. Also, to\nimprove liquidity amidst the crisis, the RBI has allowed a 3-month EMI\nmoratorium from March 1 to May 31; this means that borrowers can defer their\nEMI payments for term loans and credit card bills until May 31 without paying\nany penalty or impacting their credit score. <\/p>\n\n\n\n

\"RBI<\/figure>\n\n\n\n

Additional Read<\/strong>:- RBI’s Moratorium on EMI Payments during Covid-19<\/a><\/p>\n\n\n\n

To further better the economy, the Central Bank has\nreduced the reverse repo rate by 90 bps to 4%. Additionally, the Cash Reserve\nRatio (CRR) has been brought down to 3% of Net Demand and Time Liabilities; the\nbenefit is expected to last for one year beginning from March 28, 2020. This\nstep will create an influx of money in the economy (approximately Rs. 1.37 lakh\ncrores), making loans more affordable for consumers. This measure is directed\nto increase financial investments and ensure the country is not engulfed in the\nprojected global inflation due to the pandemic COVID-19 situation.<\/p>\n\n\n\n

Given the current monetary state, mostly fuelled by\nthe COVID-19 problem as well as due to the 2019\u2019s low global growth, it is\nexpected that the projected GDP of 4.7% in the Q4 2019-20 will take a huge\nblow. Even after the end of the lockdown, the progress trajectory of the Indian\neconomy appears bleak; hence, such measures by the apex monetary institution\nhave been ushered at the right time to provide some hope. Though the RBI has\nnot made any official statement on the growth and inflation projection, it\nsincerely depends on the overall outlook of the novel coronavirus, which has\ntill now affected more than 750 people in the country and claimed more than 19\nlives. <\/p>\n\n\n\n

Additional Read<\/strong>:- RBI Press Conference on Monetary Relief Measures in the Time of COVID-19: Key Takeaways<\/a><\/p>\n\n\n\n

In addition to these strong measures by the RBI, the Central and the State Government have taken steps to provide for the people in this hour of need. <\/p>\n\n\n\n

Know More<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Amid the rising pandemic situation of COVID-19 globally and the corresponding 21-day lockdown imposed in India. <\/p>\n

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