Sitharaman hails RBI Guv's reassuring words on financial stability

To revive growth and mitigate the impact of COVID-19 and ensure financial stability, the RBI has reduced the repo rate by 75 basis points to 4.4 percent while the reserve repo rate has been reduced by 90 basis points to 4 percent.

Lauding the reassuring words of RBI Governor Shaktikanta Das on financial stability, Finance minister Nirmala Sitharaman on Friday said that the three-month moratorium on payments of term loan installments (EMI) and interest on working capital has provided much-desired relief.

Sitharaman also hailed his statement that the macroeconomic fundamentals of the Indian economy are sound, and in fact stronger than what they were in the aftermath of the global financial crisis of 2008-09.

Appreciate @RBI @DasShaktikanta’s reassuring words on financial stability. The 3 month moratorium on payments of term loan instalments (EMI) & interest on working capital give much-desired relief. Slashed interest rate needs quick transmission. #IndiaFightsCoronavirus

— Nirmala Sitharaman (@nsitharaman) March 27, 2020

The Monetary Policy Committee (MPC) of the Reserve Bank of India has taken several measures for a swift response to the unprecedented situation. To revive growth and mitigate the impact of COVID-19 and ensure financial stability, the RBI has reduced the repo rate by 75 basis points to 4.4 percent while the reserve repo rate has been reduced by 90 basis points to 4 percent.

The Cash Reserve Ratio (CRR) of all banks has been by 100 basis points to 3 percent. All these measures will inject liquidity of Rs 3.74 lakh crore to the system.

"We are living through an extraordinary and unprecedented situation. Everything hinges on the depth of the COVID-19 outbreak, its spread, and its duration. Clearly, a war effort has to be mounted and is being mounted to combat the virus, involving both conventional and unconventional measures in continuous battle-ready mode," said Shaktikanta Das.