RBI Cuts Repo Rate to Ease Ailing Economy Amidst Corona Crisis By CIOReviewIndia Team

RBI Cuts Repo Rate to Ease Ailing Economy Amidst Corona Crisis

CIOReviewIndia Team | Friday, 27 March 2020, 08:41 IST

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RBI Cuts Repo Rate to Ease Ailing Economy Amidst Corona Crisis

In a move to stabilize the slowing down economy due to the coronavirus outbreak, RBI has decided to cut the repo rate by 75 bps. The repo rate which currently stands at 4.4 percent after the cut down is expected to ease the ailing economy of the country. The RBI reduced the reverse repo rate by 90 bps, which currently stands at 4 percent. RBI’s move came after the central banks across announced rate cuts to shield the economies from corona epidemic. In his address to media today, the Reserve Bank of India’s governor Shaktikanta Das has said that the Monetary Policy Committee voted in the favour of rate cut. "It is our effort to ensure normal functioning of the market. Need of the hour is to shield the economy from the pandemic. The economic growth and inflation projection will be highly contingent depending on the duration, spread and intensity of the pandemic," said Shaktikanta Das.

Three-month Moratorium on EMIs

The RBI also announced a three-monthmoratorium on EMIs of all kinds of loans. "All commercial banks including regional rural banks, small finance banks and local area banks, co-operative banks, all-India Financial Institutions, and NBFCs including housing finance companies and micro-finance institutions and lending institutions are being permitted to allow a moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, 2020," the RBI said in a statement. With is move of RBI, no EMI would be deducted from the accounts of anyone who has a loan outstanding for the next three months, however EMIs will resume after the three months.

The Government of India on Thursday announced a relief package of 1.7 trillion rupeesto handle the economy following the announcement of 21-day nationwide lockdown tocontrol the spread of coronavirus in the country.

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