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.
March 27, 2020 / 01:25 PM IST
Top economists in the country hailed the Reserve Bank of India's key policy announcements on March 27 in the fight against COVID-19.
While Sajid Chinoy, Chief India Economist of JP Morgan called it the 'unleashing of the Bazooka', former Reserve Bank of India (RBI) Deputy Governor HR Khan termed the central bank measures as "big, bold and brave".
"It was much more than what market was expecting," Khan told CNBC-TV18.
To provide a liquidity boost to the economy reeling under the effects of the coronavirus pandemic, the Monetary Policy Committee (MPC) cut the repo rate by 75 basis points to 4.4 percent. It also reduced the cash reserve ratio by 100 basis points to 3 percent, allowed banks to provide a three-month moratorium on all term loans, among other things.
RBI Governor Shaktikanta Das said the MPC advanced its meet to March 24, 26 and 27 in view of the COVID-19 pandemic.
Axis Bank Chief Executive Officer (CEO) Amitabh Chaudhry told CNBC-TV18 that the RBI has gone beyond what the markets were expecting.
"RBI measures solve the problem at the macro level in a big way. Will have excess Rs 6,600 crore of excess cash due to CRR cut," Chaudhry said.
Rahul Bajoria, Chief India Economist at Barclays concurred with Chaudhry. “The RBI has surpassed expectations by delivering more than what the market anticipated, and its promise to 'do whatever it takes' has come good," Bajoria told CNBC-TV18.