22 May 2020
Bhubaneswar: Reserve Bank of India (RBI) governor Shaktikanta Das is addressing a press conference where he is expected to address the current economic scenario. His address was preceded by Finance Minister Nirmala Sitharaman.
She had announced a Rs 20 lakh crore economic package in five tranches and will hold a review meeting with CEOs of public sector banks (PSBs) today to discuss various issues, including loan disbursement, as part of efforts to revive the economy reeling under the COVID-19 impact.
Here are the updates of RBI Governor’s press conference:
- India's foreign exchange reserves have increased by 9.2 billion during 2020-21 from April 1st onwards. So far, up to May 15, foreign exchange reserves stand at 487 billion USD
- Monetary policy transmission has improved. An improvement in passing on a lower rate to borrowers has been noticed across various business segments.
- In order to provide greater flexibility of SIDBI, another 90 days extension for the 90-day term loan facilities will be offered. This will provide additional liquidity support to the MSME sector.
- The loan moratorium will be extended until August 31. The lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021.
- Forex reserves stand at $ 487 billion, an equivalent of 1 year of imports
- GDP growth will remain in negative territory this year with some pickup in pulses segment.
- MPC is of the view that inflation in the first half of 2020 will be intact but, by 3rd and 4th quarter it may fall below the target of 4 per cent
- Food inflation which had eased from January 2020, peaked in February and March has now surged to 8.6 per cent in April. The price of vegetables, oilseeds, and milk emerged as pressure points.
- The biggest blow from COVID-19 has been to private consumption. India seeing a collapse of demand; electricity, dip in petroleum product consumption.
- RBI MPC, which met off-cycle, voted in the ratio of 5:1 in favour of the repo rate cut
- Repo rate cut by 40 basis points from 4.4 % to 4%. Reverse repo rate stands reduced to 3.35%.