Sitharaman appreciates RBI words on financial stability, asks for quick transmission of rate cut

Sitharaman appreciates RBI words on financial stability, asks for quick transmission of rate cut

Finance Minister Nirmala Sitharaman lauded the Reserve Bank of India's rate-cut action, saying she appreciates Governor Shaktikanta Das's words on financial stability.

AgenciesUpdated: Friday, March 27, 2020, 12:54 PM IST
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Finance Minister Nirmala Sitharaman |

She said there is a need for quick transmission of the policy after the Monetary Policy Committee decided to cut the key policy rate by a sizeable 75 basis points, along with the announcement of several measures to mitigate the economic impact of the coronavirus pandemic. "Appreciate RBI Governor's reassuring words on financial stability. Slashed interest rate needs quick transmission," Sitharaman tweeted minutes after RBI's rate action.

She also said RBI's decision to allow a three-month moratorium on all term loan and monthly instalments will give the much-needed relief to people and businesses, which are facing slowdown in activity resulting from a nationwide lockdown to contain the spread of COVID-19.

The RBI on Friday slashed the repo rate by a whopping 75 basis points to 4.4% in an emergency move to counter the economic fallout of the coronavirus-induced 21-day lockdown. The move comes after an unscheduled meeting of Monetary Policy Committee was called on Mar 24, originally scheduled for Apr 1. Four of the six members in the committee voted in favour of the 75-bps rate cut. Das said, "The economic outlook globally is uncertain and obviously negative... Financial stability is the topmost priority of the RBI in this crisis."

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