RBI Is Not Ruling Out Any Possibility Of A Rate Cut: Shaktikanta Das

Amid the novel coronavirus pandemic, apex banks of various countries are rushing to insulate themselves from the economic damages and thus invoking various policy instruments to keep the economy on track. India’s apex bank also swung into action and addressed a press conference today in which RBI governor Shaktikanta Das said: “Coronavirus outbreak rapidly evolving into a human tragedy. India is not immune to this pandemic, over 100 cases already reported. COVID-19 could impact economic impact in India directly through sectors where exposure to China is relatively high.”

Different countries are resorting to different ways to insulate themselves from the economic damages unleashed by the Covid-19. The US Fed has cut interest rates to almost zero and similarly, the Bank of England has also slashed the interest rates from 0.75 per cent to 0.25 per cent, which is one of the lowest rate in history. So, everyone was expecting that India’s apex bank would tread the same path but putting a stop to all the speculation floating around RBI governor Das said: “Rate decision will be taken in the MPC meeting. I'm not ruling out any possibility on a rate cut. We are estimating the impact of COVID-19 and we will give our growth estimates in MPC. India is relatively insulated from the global value chain; but there will be some impact.”

In order to deal with the crisis, Das announced the two most important measures and said: “The RBI has been taking some calibrated measures to ensure financial markets and institutions remain sound and resilient. The RBI has several instruments at its command and stands ready to take all necessary measures to mitigate the impact of COVID-19 on the Indian economy. Base on the current evaluation we propose to conduct another 6 months US dollar/ Rupee sell-buy swap on March 23 and RBI will conduct Long Term Repo Operation (LTRO) in multiple tranches up to a total amount of Rs 1 lakh crore at the policy rate. This will be followed by a review of performance of LTRO.”

In the briefing, he also assured the depositors of Yes Bank about the safety of their money parked in the bank and said that after 6pm on March 18, the customers of the bank can withdraw their money  and there is no need for panic withdrawal.