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.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
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.