Repo Rate-Cut by the RBI to help fight against COVID19 | Nish Bhatt, Founder & CEO, Millwood Kane International
Mr.
Nish Bhatt, Founder & CEO, Millwood Kane International, An Investment
Consulting Firm, on the recent announcement of repo rate-cut made by the RBI to
help fight against COVID19.
“India's
central bank, the Reserve Bank of India in an unusual move, advanced its
monetary policy meeting by a week. Global central banks, from the US Fed,
European Central Bank and Bank of England have already taken the lead by
announcing measures to boost demand, provide relief to the system.
The Monetary
Policy Committee which is the rate-setting body of the RBI announced a slew of
measures on Friday including rates, liquidity and payment moratorium for banks.
On the policy rate front, RBI announced a 75 bps cut to provide relief to
borrowers and boost demand as the country is under a 21-day lockdown.
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| Nish Bhatt, Founder & CEO, Millwood Kane International |
The
Central bank announced measures to boost liquidity in the system, overall
measures are expected to infuse nearly Rs 3.74 Lakh crore. Adequate liquidity
in the system will ensure a smooth flow of operations in the bond market with
yields in a desirable range.
The regulatory action which is most novel, RBI
allowed banks to provide moratorium for a period of 3 months which will help
borrowers pay EMIs later and not default on their payments.
Measures announced
by RBI, coupled with the government's efforts to contain the spread of
Coronavirus will strengthen the fundamentals of the economy.”
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