Notably, this will be the third presser by Shaktikanta Das in the context of coronavirus-related measures in the last two months. The first one was held on March 27 and the second one was on April 17. In these two pressers, the RBI governor had announced several measures to ease liquidity pressure in the banking system and to boost the economy from the coronavirus shock.
Highlights of the briefing:
MPC voted for reduction in rates. It was decided to reduce repo rate by 40 bps.
Repo rate cut by 40 bps to 4 per cent from 4.4 per cent earlier.
Reverse repo rate cut by 40 bps to 3.35 per cent.
RBI maintains accommodative stance till growth revives.
Domestic market hit due to the lockdown.
Electricity and petroleum has seen plunge in demand.
Kharif sowing was up by 45 per cent compared to the last season.
Food inflation has surged to 8. 6 per cent.
Inflation outlook highly uncertain; elevated level of inflation in pulses worrisome, requires review of import duties.
India’s merchandise exports and imports suffered their worst slump in 30 years.
MPC is of the view that headline inflation will remain firm in the first half of 2020. But there will be an ease in the second half of 2020.
MPC is of the view that macroeconomic impact of the pandemic is more severe than initially anticipated
Moratorium on loan repayments extended by additional 3 months from June 1 to August 31.
Group exposure limit for lenders to corporates raised to 30 per cent from 25 per cent.
RBI to extend Rs 15,000 crore line of credit to EXIM Bank.
RBI has decided to roll over the facility of Rs 15,000 crore for another 90 days in SIDBI.
RBI’s job is to maintain the banking system in sound condition. It is doing all it should in this direction.