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.
RBI Press Conference Reactions | Top economists hail RBI's COVID-19 rescue package, say Bazooka unleashed
The MPC cut the repo rate by 75 basis points, and initiated liquidity measures to deal with the economic impact of the COVID-19 outbreak.... Read More
RBI Press Conference Updates | RBI does its bit to tackle COVID-19 (MC Pro)
Central bank has tried to ensure that viable businesses don’t go bankrupt owing to cash flow problems. But the jury is out on whether it needs to do more, writes Moneycontrol's Ravi Krishnan Read More here
RBI Press Conference Reactions |
Steps announced by RBI will reduce interest burden on businesses/industries and will boost economic activities: Union Minister Prakash Javadekar
RBI Press Conference Key Takeaways | From rate cuts to liquidity measures, RBI goes all guns blazing
"This decision of the rate cut and the advancement of MPC have been warranted by the disruptive force of COVID-19.... Read More
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.
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.
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.
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.
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.
RBI Governor Press Conference Updates | 5 quick takes on the impact of RBI's mega virus rescue package
Interest on floating rate loans to fall and more cash with households and companies as central banks look to stem the economic fallout from the spread of the coronavirus.... Read More
RBI Governor Press Conference Reactions |
Way to go: progressive and timely measures by Shaktikanta Das by giving 3 month moratorium on payments of term loan instalments (EMI) and much-desired relief on interest on working capital. Slashing repo rate and reverse repo rate will infuse liquidity. Big, bold steps: Amitabh Kant, CEO, Niti Aayog
RBI Governor Press Conference Updates | Big cheer for consumers as RBI gives 3-month break on term loan EMIs
To ease the pressure of EMIs on retail loan borrowers as the country fights the deadly COVID-19, Reserve of Bank (RBI) Governor Shaktikanta Das March 27 cut repo rates by 75 basis points and allowed lending institutions to provide a three-month moratorium on EMI repayment on all term loans.... Read More
RBI Governor Press Conference Reactions |
It is a good move that will help enhance the liquidity levels for banks but in my view, banks were liquid enough. Apart from forbearance, was expecting measures to be introduced on turnaround of stressed assets including making June 7 SLA mandatory given NCLT issues. Given foreign funds would not be forthcoming, RBI should allow banks to earmark funds for rescue financing as it is likely to get expensive which should have NPA forbearance for two years for restructuring under the June 7 2019 circular: Abizer Diwanji, Partner & Leader Financial Services - EY India
Currency Update |
The Indian rupee appreciated by 81 paise to 74.35 against the US dollar in intra-day trade on Friday, after the Reserve Bank announced various measures including a 75 basis point cut in repo rate to support the economy amid the coronavirus-induced crisis
Read More hereRBI Governor Press Conference Updates | RBI infuses Rs 374,000cr liquidity shot: Dinesh Unnikrishnan
As expected, the RBI announced substantial liquidity measures saying it will conduct upto three-year tenure for an amount of upto Rs 100,000 crore at a floating rate linked to policy repo rate.... Read More
RBI Governor Press Conference Reactions |
The steep cut in the repo & reverse repo rates by 75 and 90 basis points is in-line with announcements made by Central Banks across the world, to mitigate the impact of the Coronavirus. The 3 month moratorium for borrowers is a huge relief for individuals. The announcements by the finance minister, yesterday and the RBI today depicts the responsiveness of our financial institutions. The relatively higher reduction in the reverse repo and the CRR is bound to push banks to look at increased lending, thereby ensuring attractive lending rates. We believe that with the repo rate now, at 4.4 percent the banks will finally be passing the benefits of the current & previous rate cuts to the customers. This will reduce the borrowing cost for the home-seeker significantly and have a positive impact on real estate. The commitment by the RBI Governor to tackle the evolving situation by making use of the many arsenals at it's disposal is very reassuring: Kaushal Agarwal, Chairman, Director at The Guardians Real Estate Advisory
RBI Governor Press Conference Reactions |
RBI went with emergency rate cut of 75 bps and reduced reverse repo by 90 basis points to make it unattractive for banks to park funds with RBI. Launch of Tltro upto 1 lakh crore, 1 percent reduction In CRR and raising MSF to inject more liquidity will be an additional boost to stimulate the economy: Abhishek Goenka, Founder & CEO, IFA Global
RBI Governor Press Conference Updates | RBI allows 3-month moratorium on loans: big relief to banks, borrowers: Dinesh Unnikrishnan
The Reserve Bank of India, on March 27, made the big announcement that the Indian middle class and small entrepreneurs have been waiting for.... Read More
RBI Governor Press Conference Reactions |
RBI announced bold set of measures amounting to ~3.2% of GDP to fight coronavirus will be well taken by the market. Measures of no asset classification downgrade for three months on term loans, working capital loans moratorium will be a relief for the industry. Providing liquidity in investment grade corporate bonds will help in improving the currently stalled credit markets. Additionally, CRR cut of 100 bp along with repo and reverse repo cuts are likely to help induce additional liquidity. We had hoped for any additional liquidity window for NBFCs & MFs which hopefully with the possible backstop from the government RBI may be able to provide in the future: Abhimanyu Sofat, Head of Research, IIFL Securities
RBI Governor Press Conference Reactions |
The RBI has surpassed expectations by delivering more than what the market anticipated, and its promise to 'do whatever it takes' has come good. The steps to ease working capital pain, reduce liquidity costs and provide moratorium on term loans will alleviate stress across various sectors. We continue to see rates dropping to 3.50% by August 2020: Rahul Bajoria, Chief India Economist, Barclays
RBI Governor Press Conference Reactions |
This is RBI’s whatever it takes moment. There would be no freeze in credit/debt market. Banks get some (CRRcut, more funding at low cost, no provisioning for 90 days) and lose some (lower lending rate, pressure to lend, future asset quality deterioration). Most positive for leveraged sectors and companies. This would not necessarily promote growth but avert a collapse, so a big positive to boost sentiments:SujanHajra, Chief Economist and Executive Director,AnandRathiShares & Stock Brokers
RBI Governor Press Conference Reactions |
RBI has announced massive liquidity boosting measures including cuts in repo rate, reverse repo rate and CRR. The Governor has also hinted about using unconventional methods if needed. In the present scenario, considering the weak sentiments in the economy, the effectiveness of monetary stimulus will be limited. Three month moratorium on loans is a welcome step:DeepthiMary Mathew, Economist atGeojitFinancial Services
Market Live Update | Nifty above 8,600, the Sensex turns red even as RBI cuts repo rate by 75 bps to 4.4%
RBI Governor Press Conference Live |
Also welcome RBI GovernorShaktikanta Das’statement: “The macro economic fundamentals of the Indian economy are sound, and in fact stronger than what they were in the aftermath of the global financial crisis of 2008-09.” And his timely reminder to #StayCleanStaySafeGoDigital, says Sitharaman
RBI Governor Press Conference Live |
AppreciateRBI Governor Shaktikanta Das' reassuring words on financial stability. The 3 month moratorium on payments of term loan instalments (EMI) & interest on working capital give much-desired relief. Slashed interest rate needs quick transmission: Finance Minister Nirmala Sitharaman
RBI Governor Press Conference Highlights | Catch all the news and developments from RBI Governor's Shaktikanta Das' address here:
- Coronavirus pandemic | RBI cuts repo rate by 75 bps to 4.40%, advances MPC meet to March 24-27
- Coronavirus pandemic | RBI infuses Rs 374,000cr liquidity shot: Dinesh Unnikrishnan
-Coronavirus pandemic: 5 quick takes on the impact of RBI’s mega virus rescue package
-From rate cuts to liquidity measures, RBI goes all guns blazing: 8 key takeaways from RBI policy
-Top economists hail RBI's COVID-19 rescue package, say Bazooka unleashed
RBI Governor Press Conference Live | RBI joins the COVID-19 economy rescue team a tad late, but with a big bang 0.75% rate cut: Dinesh Unnikrishnan
As COVID-19 economic impact likely to threaten an already slowing economy and a day after Narendra Modi government announced relief measures to the poor, the Reserve Bank of India (RBI)... Read More
RBI Governor Press Conference Live |
Depositors should not resort to panic withdrawal of their deposits. Would urge those with deposits in private banks to not indulge in panic withdrawal. The macros stronger than what it was post the financial crisis, the fiiscal deficit and CAD is much lower and inflation conditions are benign. I remain optimistic despite current challenges. COVID-19 is upon us but this to shall pass. Stay clean, stay safe and go digital: RBI Governor
RBI Governor Press Conference Live |
Indian banking sector is safe & sound. Depositors of commercial banks including pvt banks need not worry on the safety of their funds: RBI Governor
RBI Governor Press Conference Live |
RBI has injected liquidity of Rs 2.8 lakh crore via various instruments equal to 1.4% of GDP. Along with today's measures liquidity measures equal to 3.2% of GDP. RBI will take continous measures to ensure liquidity in the system: RBI Governor
RBI Governor Press Conference Live |
Incremental CCB (capital conservation buffer) implementation deferred from March 30, 2020 to Sep 30, 2020: RBI Governor
RBI Governor Press Conference Live |
Offshore Rupee NDF Market has been growing rapidly. Net Stable Funding Ratio (NSFR) was required to be introduced from April 1, 2020. Will defer NSFR implementation to October, 2020: RBI Governor
RBI Governor Press Conference Live |
Lending companies, banks are allowed tom defer interest on working capital repayments by three months. Banks may also reassess working capital cycle and will not be treated as non-performing assets: RBI Governor
RBI Governor Press Conference Live | All banks, lending institutions may allow a three-month moratorium on all loans: RBI Governor
RBI Governor Press Conference Live |
Investments will be classified as HTM, even in excess of 25% requirement. First auction of Rs 25000 crore will be conducted later on March 27: RBI Governor
RBI Governor Press Conference Live |
Investments will be classified as held to maturity (HTM), even in excess of 25% requirement: RBI Governor
RBI Governor Press Conference Live |
Mitigating debt servicing burden to prevent transmission of financial stress to real economy, provide relief to borrowers. A three month moratorium is announced on payment of installments of loans outstanding on March 1, 2020: RBI Governor
RBI Governor Press Conference Live |
Measures will result in total liquidity injection of Rs 3.74 lakh crore to system: RBI Governor
RBI Governor Press Conference Live |
Large sell offs in markets have intensified pressure.RBI will conduct auctions of long term repo operation (LTRO) of three-year tenure upto Rs1 lakh crore at floating rate linked to policy rate: RBI Governor
RBI Governor Press Conference Live | Cash Reserve Ratio cut by 100 bps to 3% of NTDL with effect from March 28, 2020: RBI Governor
RBI Governor Press Conference Live |
Appropriate that MPC decisions and other RBI actions must be seen as a comprehensive package with force multipliers. First are measures to expand liquidity in the system. Strong fiscal steps necessary to deal with situation, steps to enforce monetary transmissions and efforts to ease financial stress caused by COVID-19: RBI Governor
RBI Governor Press Conference Live |
Outlook is highly uncertain and negative: RBI Governor
RBI Governor Press Conference Live |
RBI has taken several measures to inject substantial liquidity. Priority is to undertake strong and purposeful action to protect domestic economy, Need for all stakeholders to fight against the pandemic and banks should do all they can to keep credit flowing: RBI Governor
RBI Governor Press Conference Live |
India has locked down economic activity. Keeping finance flowing is the paramount objective of the RBI. India has locker down economic activity and financial activity is under severe stress: RBI Governor
RBI Governor Press Conference Live | LAF cut by 90 bps to 4%: RBI Governor
RBI Governor Press Conference Live |
Repo rate now stands at 4.20%vs 5.15% earlier: RBI Governor
RBI Governor Press Conference Live |
MPC voted for a sizable reduction in Repo Rate and maintaining Accommodative Stance. There were some differences in quantum of reduction and MPC voted by 4:2 majority to reduce policy repo rate by 75 bps to 4.4%: RBI Governor
RBI Governor Press Conference Live |
In view ofCOVID-19pandemic,MPCadvanced its meeting.MPCmet on24th,26thand27thMarch and took care of evaluation of macroeconomic andfinancial conditions: RBI Governor
RBI Governor Press Conference Live |
Addressing you amid extraordinarycircumstances. We have decidedto address media virtually to ensure social distancing in thesetimes: RBI Governor
