New Delh RBI Governor Shaktikanta Das is addressing the media days after Finance Minister Nirmala Sitharaman unveiled details of the Rs 20 lakh crore economic package.
Governor Das said that India's gross domestic product (GDP) will see contraction and may well be in negative territory in FY21.
The Monetary Policy Committee (MPC), cut policy repo rate by 40 basis points to 4.0%. The RBI Monetary Policy Committee voted unanimously for a reduction in the policy repo rate, while voted 5:1 in favour of the quantum of the cut, Shaktikanta Das said.
Consequently, the reverse repo rate now stands reduced to 3.35%, while the MSF rate is down to 4.25%.
To ease the financial stress RBI Governor Shaktikanta Das has extended the moratorium period by another three months from June 1 to August 31 due to lockdown extension
As a result of this moratorium, individuals' EMI repayments of loans taken were not deducted from their bank accounts, providing much-needed liquidity.
The EMI payments will restart only once the moratorium time period expires on August 31.
MPC is of the view that headline inflation in first half of 2020 will be stay intact but by Q3 and Q4 it may fall below the target of 4 percent.
Shaktikanta Das on Friday said the inflation outlook is highly uncertain due to the outbreak of the COVID-19 pandemic and expressed concern over elevated prices of pulses.
He also said there is a need to review import duties to moderate prices.
RBI allocates Rs 15,000 crore to EXIM banks to avail US dollar swap facility. This will have a rollover facility to up to one year.
Lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021
India's merchandise exports slumped to the worst level in 30 years as coronavirus crisis paralysed demand across the globe says Das
The deepening of contraction in trade activities has hampered India. Maximum permissible period of pre and post shipment of credits increased from 1 year to 15 months.
RBI announced voluntary retention route for FPIs and allowed extension of 3 months to meet 75% utilisation of investment limits.
RBI Governor says India seeing a collapse of demand; electricity, dip in petroleum product consumption; fall in private consumption.
Agriculture and allied activities have given a beacon of hope for the country, said the RBI Governor. A ray of hope is also brought in from the normal south-west monsoons this year, added Shaktikanta Das.
Shaktikanta Das is laying out the economic conditions prevailing in India amid the ongoing coronavirus crisis.
The biggest blow from COVID-19 came from private consumption slump with consumer durables production falling 33 percent in March 2020, says RBI governor Shaktikanta Das.
There is a collapse in demand in both urban and rural demand since March 2020, says Shaktikanta Das. This, he said, has taken a toll on fiscal revenues.
The RBI had on March 27 slashed the benchmark interest rate by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown.
Earlier this month, RBI Governor Shaktikanta Das held a meeting with heads of both public and private sector banks to take stock of the economic situation and review implementation of various measures announced by the central bank.