RBI Policy LIVE : RBI cuts Repo Rate by 75 basis points, Reverse Repo by 90 basis points

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Mumbai: In the wake of COVID19 pandemic, the RBI on Friday reduced Repo rate by 75 basis points to 4.4% .Reverse Repo also slashed by 90 basis points to 4%. RBI also reduced CRR by 100 basis point for all banks to 3%.

RBI government Shaktikant Das announced this after the end of the special Monetary Policy Committee (MPC) meeting.

“On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (March 27, 2020) decided to  reduce the policy repo rate under the liquidity adjustment facility (LAF) by 75 basis points to 4.40 per cent from 5.15 per cent with immediate effect. Accordingly, the marginal standing facility (MSF) rate and the Bank Rate stand reduced to 4.65 per cent from 5.40 per cent. further, consequent upon the widening of the LAF corridor as detailed in the accompanying Statement on Developmental and Regulatory Polices, the reverse repo rate under the LAF stands reduced by 90 basis points to 4.0 per cent” said RBI.

“The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of coronavirus (COVID-19) on the economy, while ensuring that inflation remains within the target” it added.

“If COVID19 is prolonged and supply chain disruptions get accentuated, the global slowdown could deepen, with adverse implications for India. The slump in international crude prices could, however, provide some relief in the form of terms of trade gains. Downside risks to growth arise from the spread of COVID-19 and prolonged lockdowns. Upside growth impulses are expected to emanate from monetary, fiscal and other policy measures and the early containment of COVID-19” said Das.

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