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March 27, 2020 / 01:13 PM IST

RBI Governor Press Conference Highlights | RBI has taken giant steps to safeguard economy: PM Modi

Repo rate now stands at 4.40% vs 5.15% earlier

Reserve Bank of India (RBI) governor Shaktikanta Das March 27 announced a massive 75 basis points cut in repo rates as a measure to counter the economic slowdown caused by the COVID-19 pandemic.

The reverse repo rate has been cut by 90 basis points to 4 percent. Das said this has been done to make it unattractive for banks to passively deposit funds with the RBI and instead lend it to the

productive sectors.

The RBI rate cut comes just a day after Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore relief package for the poor.

The economy has been battered by the coronavirus (COVID-19) pandemic and governments across the globe have taken measures to combat the impact.

Follow our LIVE Updates on COVID-19 here.

Among the expectations include a 25-50 bps rate cut, NPA forbearance and more liquidity easing measures. The extent of a rate cut will be a signal that the central bank has our backs, experts believe.
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  • March 27, 2020 / 01:02 PM IST

    RBI Press Conference Reactions | Steps announced by RBI will reduce interest burden on businesses/industries and will boost economic activities: Union Minister Prakash Javadekar

  • March 27, 2020 / 12:32 PM IST

    PM Modi reacts to RBI measures ##RBI Press Conference Reactions | Today RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce cost of funds, help middle class and businesses: Prime Minister Narendra Modi

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  • March 27, 2020 / 12:22 PM IST

    RBI Press Conference Quick Takes | Forward guidance
    The RBI governor’s statement that ‘whatever steps are necessary—all instruments, conventional and unconventional are on the table’, raises the hope that further steps will be taken down the road, if problems persist.

  • March 27, 2020 / 12:21 PM IST

    RBI Press Conference Quick Takes | Liquidity in money markets
    Money markets were facing pressures from redemptions by mutual funds. The Targeted Long-term Refinancing Operations (TLTRO) will give cash to banks, which they are supposed to invest in investment-grade bonds, commercial paper etc. This will be reassuring for the money markets, ensuring they don’t seize up.

  • March 27, 2020 / 12:20 PM IST

    RBI Press Conference Quick Takes | Forbearance
    Moratorium on payment of instalments on term loans will help people to postpone payment of EMIs and help their cash position. This will support cash flows of firms too. The same goes for deferment of interest on working capital loans.

  • March 27, 2020 / 12:19 PM IST

    RBI Press Conference Quick Takes | Cut in cash reserve ratio
    The 100 basis point cut in cash reserve ratio (CRR) means more money with banks, especially private sector banks. Some of them had to access the wholesale funding markets, making CD rates go up. Greater access to MSF (Marginal Standing Facility) will also give banks more access to funds. The move will ensure financial stability.

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  • March 27, 2020 / 12:17 PM IST

    RBI Press Conference Quick Takes | Repo rate cut
    The 75 basis point cut (One basis point is a hundredth of a percentage point) in repo rate is a powerful signal no doubt, aimed at lowering the cost of funds. Problem is it is of limited use in the lockdown. Yet, the interest on floating rate housing loans will come down, helping household cash flow.

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