Sunday, 24 May 2020

The RBI policy announcement in response to


“The RBI policy announcement in response to the fallout of COVID pandemic is timely. The reduction in policy rate by 40 bps under the assumption that growth in FY21 will be negative is an appropriate move to support economic activity. 

Uncertainty associated with pandemic, normalization of economic activity and relaxation made in social distance makes it imperative that policy response is calibrated and swift. In this context, extension of moratorium till August 31, enlargement of the Large Exposure Framework and option to convert accumulated interest for moratorium period into term loan are welcome measures. 

On the export side, increase in export credit period to 15 months from 1 year and buttressing EXIM Bank through Rs 15,000-cr line of credit is also timely.

Overall, the successive measures by RBI and Government indicates the desire to go full throttle to support the economy in current unprecedented times!”

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