Taking off where Finance Minister Nirmala Sitharaman had left off, Reserve Bank of India (RBI) Governor Shaktikanta Das today announced a slew of measures expected to provide relief to the economy ailing due to the coronavirus lockdown. Notably, this was Das's third such press conference after the beginning of the lockdown on March 25.
Here are the major takeaways from the RBI Governor's address from earlier this morning:
The RBI Governor announced that the bank will now cut the repo rate by 40 bps to 4 per cent. Additionally, the RBI will now cut reverse repo rate by 40 basis points to 3.35 per cent.
Meanwhile, the three-month moratorium to pay loans has been extended from June 1 to August 31 so as to make it easier for individuals as well as businesses to pay back their loans.
The RBI has also allocated Rs 15,000 crore to the Export Impost (EXIM) bank to avail US dollar swap facility. This is expected to have a rollover facility to up to one year. Das also announced that the RBI will increase export credit period to 15 months from 1 year.
The RBI has also offered another 90-days extension to the Small industrial Development Bank of India (SIDBI) for the 90-day term loan facilities.
It may be recalled here that Das, after the lockdown began, had slashed the benchmark interest rate (repo rate) by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers.
These measures have been announced within a week of Finance Minister Nirmala Sitharaman's announcement of a Rs 20 lakh crore economic package that is expected to tide people and businesses over the crisis period, with a special emphasis on a "self-reliant" India vision as promulgated by the nation's Prime Minister Narendra Modi.