Monday, May 25, 2020 | Last Update : 11:37 AM IST

62nd Day Of Lockdown

Maharashtra50231146001635 Tamil Nadu162778324112 Gujarat140636412858 Delhi134186540261 Rajasthan70283848163 Madhya Pradesh66653408290 Uttar Pradesh62683538161 West Bengal36671339272 Andhra Pradesh2780184156 Bihar257470211 Karnataka208965442 Punjab2060189840 Telangana1854109253 Jammu and Kashmir162180921 Odisha13365507 Haryana118476516 Kerala8485206 Assam393584 Jharkhand3701484 Uttarakhand317583 Chandigarh2621794 Chhatisgarh252640 Himachal Pradesh203594 Tripura1941650 Goa66160 Puducherry41120 Manipur3220 Meghalaya14121 Arunachal Pradesh210 Mizoram110 Sikkim100

RBI likely to cut interest rates by 100 bps in FY21: Fitch Solutions

PTI
Published : Mar 31, 2020, 5:30 pm IST
Updated : Mar 31, 2020, 5:30 pm IST

Fitch Solutions said consumer price inflation returning back to the RBI's 2-4 per cent target range will permit further monetary easing

 Representative Image (PTI)
  Representative Image (PTI)

New Delhi: The RBI is likely to cut benchmark interest rate by another 100 bps in 2020-21 fiscal and continue to employ all policy tools at its disposal to support growth and financial stability to contain the impact of Covid-19 pandemic on the economy, Fith Solutions said Tuesday.

The Reserve Bank of India (RBI) cut benchmark repurchase (repo) rate by 75 basis points and its reverse repurchase rate by 90 basis points at an emergency meeting on March 27, bringing the rates to 4.40 per cent and 4.00 per cent, respectively, from 5.15 per cent and 4.90 per cent, previously.

In an outlook for India's interest rates, Fitch Solutions said an easing of inflation back within the RBI's 2-6 per cent target range will provide room for the RBI to ease monetary policy further over the course of the year to support the economy.

"We at Fitch Solutions expect the central bank to cut its policy rates by another 100 bps by end-FY2020/21 (April-March) as well as continue employing all policy tools at its disposal to support growth and financial stability as the economy gets severely hit by the Covid-19 pandemic," it said.

Additionally, it expects a sharp increase in government borrowing over the coming months to tighten credit conditions, this should see the RBI step in to lower rates through further cuts to its benchmark rates and increase its government bond purchases through open market repo operations.

The government's Rs 1.7 lakh crore fiscal stimulus announced on March 26 accounts for 0.7 per cent of GDP, which Fitch said was "grossly inadequate" given the strong headwinds the Indian economy will face.

Fitch Solutions said consumer price inflation returning back to the RBI's 2-4 per cent target range will permit further monetary easing.

Headline inflation was last recorded to have eased slightly to 6.6 per cent in February, from 7.6 per cent in January.

Tags: fitch solutions, fitch rating, fitch rating agency, reserve bank of india (rbi), coronavirus (covid-19), coronavirus outbreak
Location: India, Delhi, New Delhi
ADVERTISEMENT
ADVERTISEMENT