Today, the Central Bank of India has decided to cut its key interest rate. The regulator was forced to take this measure in order to compensate for the negative economic consequences of the coronavirus pandemic. This can be done by increasing liquidity.
Thus, at the moment, the repo rate amounts to 4.4% per annum. The decrease has totaled 75 basis points. This value has been the lowest over the past ten years. The reverse repo rate was also reduced by 90 basis points. At present, its value is 4% per annum.
The Central Bank of India had to inject liquidity into the amount of 50 billion US dollars. This was done to reduce volatility and support volatile financial markets.
Yesterday, the government of India released a package of measures that will support the Indians in terms of the pandemic. About 1.7 trillion Indian rupees are planned to be spent on these purposes.
India could never boast of a stable economy, and now the situation is rapidly going down. The poorest citizens of India are the most vulnerable; they are among those who will be most affected by the quarantine.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group