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| India's GDP to grow at 7.4 per cent in 2020-21, best among G20 nations: RBI Governor Shaktikanta Das | | | New Delhi: The Reserve Bank of India (RBI) on Friday (April 17) reduced the reverse repo rate by 25 basis points from four per cent to 3.75 per cent in a bid to inject liquidity in financial markets. However, the repo rate remains unchanged. This comes amid the COVID-19 pandemic and the subsequent countrywide lockdown.
RBI Governor Shaktikanta Das said the liquidity injection has been 3.2 per cent of GDP since February 6 to March 27. "The RBI has been taking pro-active measures and monitoring the situation closely. The contraction in exports at 34.6 per cent has been much worse than 2008-09 global financial crisis," Das said.
He said that India is expected to post a sharp turnaround by growing at 7.4 per cent in 2020-21
"For 2020-21, International Monetary Fund projects sizable reshaped recoveries, close to 9 percentage points for the global GDP. India is expected to post a sharp turnaround and resume its pre-COVID, pre-slowdown trajectory by growing at 7.4 per cent in 2020-21," the RBI Governor said, adding that banks, financial institutions have risen to occasion to ensure normal functioning during the outbreak of the pandemic.
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With regard to other measures, Das said RBI will begin with giving an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) to be undertaken in tranches. Besides, he announced a re-financing window of Rs 50,000 crore for financial institutions like Nabard, National Housing Bank and Sidbi.
He further said surplus liquidity in the banking system has increased substantially as a result of the central bank's actions.
Stating that the RBI is monitoring the situation developing out of COVID-19 outbreak, he noted that the contraction in exports in March at 34.6 per cent was much more severe than the global financial crisis of 2008-09. He said automobile production and sales declined sharply in March while electricity demand has fallen sharply.
This is the RBI Governor's second press briefing since the coronavirus COVID-19 outbreak began in India. In his previous address on March 27, he had announced a rate cut of 75 basis points. |
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