Shaktikanta Das, governor of the Reserve Bank of India (RBI), speaks during an interview at the central bank in Mumbai, India. (Photographer: Kanishka Sonthalia/Bloomberg)
6 years ago
Mar 27, 2020
RBI Press Conference Live: RBI Governor Shaktikanta Das is set to address a press conference at 10:00 a.m. today amid expectations of monetary policy measures to tackle the effects of India's coronavirus lockdown. Track live news updates and key decisions taken, here:
A multi-pronged approach has been adopted to ensure liquidity, Das said.
RBI will conduct auctions of TLTRO of upto three-year tenor of appropriate sizes for a total amount upto Rs 1 lakh crore at a floating rate, linked to policy repo rate.
Liquidity availed under this by banks have to be deployed in commercial papers, investment-grade corporate bonds and non convertible debentures, over and above their investment in these as of March 25, 2020.
Eligible instruments include those in primary markets and secondary market purchases such as mutual funds.
Investments made by banks under this facility will be classified held-to-maturity even in excess of 25 percent of total investment permitted in HTM portfolio
First TLTRO action of Rs 25,000 cr will be conducted later today
CRR of all banks to be reduced by 100 basis points to 3 percent beginning March 28, for one year. This will release liquidity of 1,37,000 crore across the banking system.
MSF raised from 2 percent of SLR to 3 percent with immediate effect. Applicable upto June 30, 2020.
These three liquidity measures will inject liquidity of Rs 3.74 lakh crore to the system.
In view of the covid-19 pandemic, the MPC reschedules its meeting.
The MPC voted for sizable reduction in repo rate, maintaining accommodative stance in order to boost growth and maintaining financial stability while keeping inflation in the mandated range.
With this, the MPC has decided to slash the repo rate by 75 basis points, Das said. Reverse Repo Rate has been cut by 90 basis points, making it unattractive for banks to deposit funds with RBI
The RBI has announced a series of steps to add liquidity to the system since then. It has conducted $4 billion in long term forex swaps to ensure dollar liquidity. It has also announced Rs 1 lakh crore in long term repo operations and added short term liquidity through its repo window.
