The Reserve Bank has announced a steep cut in the repo rate by 0.75%. RBI (Reserve Bank of India) Governor Shaktikanta Das said that because of the outbreak of the coronavirus, the Monetary Policy Review (MPC) met on March 25 to 27, which decided to reduce the repo rate by 0.75%. Now the Repo Rate has gone up to 4.40%. Earlier, the repo rate stood at 5.15%. In addition, the reverse repo rate has been cut by 0.90%. RBI has announced a steep cut in the repo rate in exceptional circumstances arising out of coronavirus. The repo rate cut will drastically reduce home loan and car loan EMIs. The burden on your pocket will be reduced.
RBI has decided to reduce the mandatory Cash Reserve Ratio (CRR) from four percent to three percent for all banks. The decision has been taken with the goal of ensuring more liquidity with the banks. The decision will come into effect from the fortnight beginning March 28. The central bank has announced relief to banks for one year in the CRR limit. The RBI governor has announced the decision at a time when COVID-19 is a lockdown situation across the country. All kinds of economic activities have stopped due to lockdown. Das said that the Reverse Repo Rate has been curtailed so that the bank has shown a flexible approach in giving loans instead of depositing money with the central bank.
RBI did not reveal any estimates about the economic growth rate due to uncertainty caused by the coronavirus. The RBI has announced a number of measures to ensure the availability of liquidity in the system under these circumstances arising out of coronavirus. As soon as the news of the RBI governor's address came to the fore, the stock market was seen to be very enthusiastic.
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