RBI Governor Shaktikanta Das addressed a press briefing on 17th April, 2020. This was his second briefing since the COVID-19 outbreak. In his previous address on March 27,2020 the governor announced several relief measures approved by its Monetary Policy Committee (MPC) to counter the economic slowdown. This remained a big focus for the investors as the country hopes for a second stimulus package from the Central Bank.
Key Highlights of the Press Conference –
1. Banks are instructed not to payout further dividends in view of financial difficulties until further notice.
2. Reverse repo rate is being reduced by 25 bps from 4% to 3.75% under the Liquidity adjustment facility (LAF).
3. India is likely to witness a major turnaround in Y22 with a 7.4 % growth as per IMF.
4. India is projected to have the highest growth rate among G20 countries as per IMF.
5. To benefit NBFCs and Micro – Financial Institutions, RBI will undertake three long-term repo operations (TLTRO) 2.0 amounting to Rs 50,000 crores to ease liquidity constraints, which can be further increased. The TLTRO 2.0 option of Rs 25000 crore has been conducted on April 17, 2020.
6. RBI has injected 3.2% of GDP into the economy to tackle liquidity situation.
7. The LCR requirement of scheduled commercial banks being brought down from 100 % to 80% with immediate effect. This shall be restored to 90% by October 2020 and 100 % by April 2021
8. Rs 50,000 crores special finance facility to be provided to NABARD (RS 25,000 crores), SIDBI (Rs 15,000 crores) and NHB (RS 10,000 crores).
9. Banks to maintain higher provision at standstill, which can be adjusted later for actual slippages.
10. Period of resolution plan for NPAs to be extended by 90 days.
11. The services PMI contracted due to a sharp downturn due to the hit to export. The contraction in exports in March is at 34.6 %.
12. Around 25-30% sharp decline in electricity demand due to coronavirus.
13. Automobile production and sale declined sharply in March.
14. The Indian Meteorological Department (IMD) has forecast a normal southwest monsoon. Rainfall expected at 100% of long term average.
15. Since the last address on March 27, the microeconomics and financial landscape have deteriorated in some areas.
16. Reserve Bank of India has been very proactive. Have been coming out with announcements.
-By Roshan Mintri
Youtube:Enthusiastic Trader
Mail Id: roshanmintri@ymail.com
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[Disclaimer:-This article is being furnished for informational purposes only. We make every effort to use reliable & comprehensive information, but we do not represent that the contents of the article are accurate or complete.]
Very informative and brief. Excellent
ReplyDeleteThank you :)
ReplyDeleteConcise and helpful info. Great article
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