RBI cuts reverse repo rate by 25 bps to 3.75%
To allow banks to use liquidty surplus into economy, reverse repo rate is being reduced by 25 bps from 4 per cent to 3.75 per cent under Liquidity adjustment facility (LAF), says RBI Governor Shaktikanta Das
The Reserve Bank of India (RBI) on April 17 cut the reverse repo rate by 25 basis points (bps) to 3.75 per cent versus 4 per cent earlier, as the central bank ramped up measures to relieve pressure on an economy ravaged by the coronavirus pandemic. In the last meeting on March 27, the RBI had announced a massive 90 bps cut in reverse repo rate, the rate at which the RBI borrows money from banks by lending securities, to ensure surplus liquidity in the system.
The central bank, however, kept all key rate, including repo rate, unchanged.
"On April 15, Rs 6.91 crore surplus was in the system. To allow banks to use this surplus into economy, reverse repo rate is being reduced by 25 bps from 4 per cent to 3.75 per cent under Liquidity adjustment facility (LAF)," said RBI Governor Shaktikanta Das while addressing the media on Friday.
The policy measures taken by the RBI will sizeably expand liquidity in the system, which will ensure that financial markets and institutions are able to function normally in the face of COVID-19 related dislocations. This will also reinforce monetary transmission so that bank credit flows on easier terms are sustained to all those who have been affected
Amid COVID-19 outbreak, financial markets have become highly volatile resulting in panic sell-offs and wealth destruction in Indian equity markets, in line with global peers. The RBI and the central government are in war mode, responding to the situation with several conventional and unconventional measures targeted at easing financial conditions to avoid a demand collapse and to prevent financial markets from freezing up due to illiquidity.
Following the reason BANK NIFTY gains more than 6% and NIFTY gains more than 3% today. Also global clues are positive
Source : Et
To allow banks to use liquidty surplus into economy, reverse repo rate is being reduced by 25 bps from 4 per cent to 3.75 per cent under Liquidity adjustment facility (LAF), says RBI Governor Shaktikanta Das
The Reserve Bank of India (RBI) on April 17 cut the reverse repo rate by 25 basis points (bps) to 3.75 per cent versus 4 per cent earlier, as the central bank ramped up measures to relieve pressure on an economy ravaged by the coronavirus pandemic. In the last meeting on March 27, the RBI had announced a massive 90 bps cut in reverse repo rate, the rate at which the RBI borrows money from banks by lending securities, to ensure surplus liquidity in the system.
The central bank, however, kept all key rate, including repo rate, unchanged.
"On April 15, Rs 6.91 crore surplus was in the system. To allow banks to use this surplus into economy, reverse repo rate is being reduced by 25 bps from 4 per cent to 3.75 per cent under Liquidity adjustment facility (LAF)," said RBI Governor Shaktikanta Das while addressing the media on Friday.
The policy measures taken by the RBI will sizeably expand liquidity in the system, which will ensure that financial markets and institutions are able to function normally in the face of COVID-19 related dislocations. This will also reinforce monetary transmission so that bank credit flows on easier terms are sustained to all those who have been affected
Amid COVID-19 outbreak, financial markets have become highly volatile resulting in panic sell-offs and wealth destruction in Indian equity markets, in line with global peers. The RBI and the central government are in war mode, responding to the situation with several conventional and unconventional measures targeted at easing financial conditions to avoid a demand collapse and to prevent financial markets from freezing up due to illiquidity.
Following the reason BANK NIFTY gains more than 6% and NIFTY gains more than 3% today. Also global clues are positive
Source : Et