RBI cuts reverse repo rate by 25 bps, repo unchanged
Surplus liquidity in the banking system has increased substantially as result of central bank's actions: Shaktikanta Das
Mumbai: The Reserve Bank of India Governor Shaktikanta Das on Friday said the central bank will ensure adequate liquidity in the system to ease the financial stress caused by the Covid-19 pandemic.
The central bank reduced the reverse repo rate the rate at which banks park their fund with the central bank by 25 basis points to 3.75 per cent.
This will encourage banks to lend to the productive sectors of the economy.
With regard to other measures, Das said RBI will begin with giving an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) to be undertaken in tranches.
Besides, he announced a re-financing window of Rs 50,000 crore for financial institutions like Nabard, National Housing Bank and Sidbi.
He further said surplus liquidity in the banking system has increased substantially as result of central bank's actions.
CPI infaltion for March declined by 70 bps to 5.9 percent. This is however, based on data gathered up to March 19. The data showed softening of food inflation by around 160 bps on account of easing of prices of vegetables, eggs, pulses, meat, fish, etc. In other categories of CPI inflation pressure remain firm said RBI Governor Shaktikanta Das
RBI has injected 3.2 percent of GDP into the economy to tackle liquidity situation, Das said
This is the second time that the governor addressed the media since the nationwide lockdown was imposed from March 25.