coronavirus update indiaas on : 02 June 2020 04:01 GMT+5:30
RBI Extends Loan Moratorium Till August,Cuts Key Lending Rate Further
RBI Governor Shaktikanta Das announced a cut in the repo rate by 40 basis points (bps) to 4 percent
RBI Extends Loan Moratorium Till August, Cuts Key Lending Rate Further
New Delhi: Reserve Bank Of India Governor Shaktikanta Das announced a cut in the repo rate by 40 basis points to 4 percent while addressing his third press conference to announce measures related to Coronavirus.
That marked the second cut in the repo rate of the key interest rate at which the RBI lends short-term funds to commercial banks so far this year, in a move that will allow banks more room to lower the EMI burden for their borrowers.
The announcements were aimed at countering the fallout from the ongoing nationwide lockdown to contain the spread of the coronavirus pandemic.
5 things to know about the big story:
1-While the repo rate was reduced to 4 percent, the reverse repo rate the interest rate at which the RBI borrows fund from a commercial bank was lowered to 3.35 percent
2-Five members of the Monetary Policy Committee voted in favor of rate reduction, said RBI governor through a video address
3-Also the committee decided to continue with its "accommodative" stance of policy, which means the central bank is ready to ease the monetary policy further to support the financial system.
4-Mr Das also said that the economy is expected to remain in the negative territory in the current financial year, due to the coronavirus pandemic.
5-The RBI in March had slashed the repo rate by 75 bps to stimulate growth and the next month it unexpectedly lowered the key deposit rate