The RBI has announced a drastic reduction in the repo rate in circumstances arising due to coronavirus. This will drastically reduce the EMI of your home loan and car loan.
The Reserve Bank has announced a drastic reduction of 0.75 per cent in the repo rate. RBI (Reserve Bank of India) Governor Shaktikanta Das said that in view of the outbreak of Coronavirus, the Monetary Policy Review (MPC) meeting was held from 25 to 27 March in which it was decided to reduce the repo rate by 0.75 per cent. Now the Repo Rate is 4.40 percent. Earlier Repo Rate was at 5.15 percent. Apart from this, the Reverse Repo Rate has been reduced by 0.90 percent. With this, the reverse repo rate came down to four percent. The RBI governor said that the Reverse Repo Rate has been cut so that banks show a flexible approach in lending instead of depositing money with the central bank.
The RBI has announced a drastic reduction in the repo rate in exceptional circumstances arising out of coronavirus. The reduction in the repo rate will significantly reduce the EMI of home loans and car loans. The burden on your pocket will decrease.
RBI has decided to reduce the mandatory Cash Reserve Ratio (CRR) for all banks from four percent to three percent. This decision has been taken with the goal of ensuring more cash with banks. This decision will come into effect from the fortnight beginning on March 28. The central bank has announced a relaxation in the CRR limit for one year.
Repo rate reduced by 75 basis points to 4.4.%. Reverse repo-rate reduced by 90 basis points to 4%: RBI Governor Shaktikanta Das pic.twitter.com/eBb0WPAG21
Listen to RBI Governor’s Speech
Governor’s address to media https://t.co/vsfV13L0UK
— ReserveBankOfIndia (@RBI) March 27, 2020
The outlook is now heavily contingent upon the intensity, spread & duration of the pandemic. There is a rising probability that large parts of the world will slip into recession: RBI Governor Shaktikanta Das https://t.co/53EsBnGSOL
— ANI (@ANI) March 27, 2020
The RBI governor categorically stated that due to the coronavirus epidemic, a large part of the world has come to fear of recession. Das said that we are facing extraordinary circumstances and war-level efforts need to be made to stop the coronavirus.
India has locked down economic activity and financial markets are under severe stress. Finance is the lifeline of the economy, keeping it following is the paramount objective of the Reserve Bank of India at this point of time: Shaktikanta Das, RBI Governor https://t.co/14nEgV7U2N
— ANI (@ANI) March 27, 2020
Let us know what other measures the RBI Governor has announced:
- The RBI has announced a range of measures to ensure the availability of cash in the system under these circumstances arising from coronavirus.
- In the uncertain environment, the Monetary Policy Committee of RBI has not made any estimates related to GDP growth and inflation rate in the coming financial year.
- The RBI governor said that food grain prices may fall due to record grain yields.
- He said that the global slowdown could have adverse effects on India; The fall in crude oil prices is a good thing for India.
- Das said that the financial market is under pressure and the central bank’s measures are needed to bring the market stability and economic growth back on track.
- The RBI governor said that the central bank will conduct a repo of Rs 1 lakh crore to inject cash into the market.
- Das said that with the measures announced today, cash of Rs 3.74 lakh crore will be added to the system.
- The governor said that RBI is allowing three months moratorium to all lending institutions on payment of installment of term loan.
- Das said that the country’s banking system is secure; Deposits in private banks are safe, people do not need to withdraw money in a hurry.
- RBI Governor said that the foundation of the country’s economy is stronger than in the financial crisis of 2008.