Coronavirus impact: How much of a rate cut can you expect from RBI?

A rate cut will be a signal that the central bank has our backs.

March 27, 2020 / 09:49 AM IST
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File image

Reports indicate that the Monetary Policy Committee meeting has already taken place and we now await the RBI announcement. While consumer price inflation was at 6.58 percent in February, that’s yesterday’s news.

Crude oil prices have collapsed and that will pull down headline inflation. More importantly, a rate cut will be a signal that the central bank has our backs.

Here’s how much other central banks have cut their rates in response to the economic damage caused by the COVID-19 pandemic:

From Jefferies Equity Research:

Rate cuts by central banks in March 2020

Close

USA   150 basis points

Canada  100 bps

South Africa  100 bps

Vietnam  100 bps

New Zealand   75 bps

UK      65 bps

Australia 50 bps

Brazil   50 ps

Mexico  50 bps

Philippines  50 bps

Indonesia   25 bps

Malaysia   25 bps

Thailand    25 bps
Manas Chakravarty
first published: Mar 27, 2020 09:49 am

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