“We Shall Cure, We Shall Endure”- RBI Governor Announces Ameliorative Measures In Wake Of COVID-19

New Delhi: While Coronavirus pandemic continues to sweep the world shutting down economies, the Reserve Bank of India on Friday announced a slew of measures to help the country fight the economic blues resulting from the impact of the lockdown. The RBI also cut reverse repo rate by 25 basis points to 3.75%, while keeping the repo rate unchanged.“Our mission is to do whatever it takes to flatten the epidemiological curve of the coronavirus pandemic. RBI has been proactive and closely monitoring the evolving situation. It has been coming out with a slew of announcements to fight the virus,” said RBI Governor Shaktikanta Das while addressing a press conference today.Das said in order to encourage banks to deploy the surplus funds in investments and loans in productive sectors of the economy, it has been decided to reduce the fixed-rate reverse repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 4 percent to 3.75 percent with immediate effect.The reverse repo rate is the rate banks earn by parking deposits with the RBI.“The policy repo rate remains unchanged at 4.4 percent, and the marginal standing facility rate and the bank rate remain unchanged at 4.65 percent,” he said.“Cumulative losses to global GDP in 2020 and 2021 at the US $9 trillion, worst global recession ever since The Great Depression. IMF projection of 1.9% GDP growth for India is highest in G20. India is among the handful of countries that are projected to strenuously stick to growth trajectory amid COVID-19. India is expected to post a sharp turnaround in 2020-21,” added Das.“India is among the handful of countries projected to register a positive growth rate amid the #Covid_19 crisis. The country is expected to resume its pre-slowdown trajectory by growing at 7.4% in 2021-22. RBI proposes to maintain adequate system liquidity, facilitate and incentivise bank credit flow, ease financial stress,” the RBI Governor added.Surplus liquidity in the banking system has risen significantly in the wake of government spending and the various liquidity enhancing measures undertaken by the RBI, he noted. Das also announced special refinance facilities for a total amount of Rs 50,000 crore to Nabard, Sidbi and National Housing Bank (NHB) to enable them to meet sectoral credit needs. To provide greater comfort to the states for undertaking COVID-19 containment and mitigation efforts, the RBI announced a 30 percent increase in the ways and means advances limit.

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