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COVID-19 Effects: RBI reduces repo rate by 75 basis points to 4.4%

COVID-19 Effects: RBI reduces repo rate by 75 basis points to 4.4%

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NEW DELHI: RBI governor Shaktikanta Das on Friday announced a series of steps to boost liquidity in a stimulus worth 3.2% of GDP to counter the economic impact of the coronavirus outbreak.

Here are key points from Das’s announcements:

*All lending institutions can allow three-month moratorium on EMI payments.

*Deferment on loan and interest repayments will not be classified as defaults and will not impact credit history of borrowers.

* Policy repo rate has been reduced by 75 basis points from 5.15% to 4.4%.

* Reverse repo rate reduced by 90 basis points to 4%.

* Monetary Policy meet scheduled for March 31-April 3 was advanced to March 25-27.

* Monetary policy committee voted 4:2 majority to cut repo rate by 75 basis points.

* Reverse repo rate cut more so that banks are incentivised to lend, RBI governor said.

* Cash Reserve Ratio (CRR) of all banks have been reduced by 100 basis points to 3 per cent of net demand and time liabilities with effect from the fortnight beginning March 28 for a period of 1 year.

* RBI to inject liquidity worth Rs 3.74 lakh crore into the system.

* Banking system in India safe; deposits safe in private bank; public should not resort to panic withdrawal, Das said.

Source: timesofindia.indiatimes
Anand Gupta Editor - EQ Int'l Media Network

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