RBI announces measures to lessen impact of Coronavirus on economy; warns of slow growth

With Sensex crashing over 2000 points, RBI goverr Shaktikanta Das, on Monday, assured that while Indian ecomy was affected by pandemic Coronavirus (COVID-19), domestic liquidity conditions remain comfortable. He said that tre in sectors like drugs, electronics, pharmaceuticals, chemicals, etc which were most exposed to China was hurt most. He also introduced two measures to battle ecomic slowdown due to a fall in tre.

Sensex sedives 2,713 pts; Nifty gives up 9,200-mark

RBI anunces measures to improve Indian ecomy

• RBI will conduct ar 6 months US dollar sell-buy swap on March 23 to provide liquidity to Foreign Exchange market.
• To counterbalance domestic liquidity effects of sell-buy swap,  RBI will conduct LTRO in multiple tranches upto a total amount of Rs 1 lakh crores at policy rate. This will be followed by a review of performance of LTRO.

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Impact of COVID-19 on Indian ecomy

Talking about war-footing efforts undertaken by Indian government to tackle ecomic slowdown due to pandemic, Das said that domestic ecomic growth will be hit in second round due to synchronised slowdown in global growth. Listing sectors like tourism, hospitality, airlines and ors, which have been severely hit due to stall of global travel, he said that RBI has several policies in its command to make markets function rmally. To support minimal social contact, he said it is a good idea to use digital use of payment wherever cash payment is involved by using apps like IMPS, UPI, Bharat Bill Payment Systems.

"India is t immune to this pandemic. Efforts have been done on a war footing. COVID -19 can hurt India in tre channels especially in drugs, electronics, pharmaceuticals, chemicals, etc in which exposure to China is more. second round of effects of pandemic could operate through a slowdown in domestic ecomic growth and it would obviously be a result of a synchronised slowdown in global growth. As a part of that, growth momentum in India would also be impacted somewhat," he said.

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He ded, "But lack of response to our 7-day Repo auction of Rs 25,000 crore has reassured us that domestic liquidity conditions remain comfortable. Alrey sectors like tourism, hospitality, airlines, and ors are being affected due to outbreak. RBI has several policies in its command stand rey to ensure that effects of COVID-19 are mitigated and financial markets function rmally."

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Sensex crashes by 2713 pts

Resuming its free fall, BSE Sensex plunged over 2,713 points on Monday, tracking a selloff in Asian peers as coronavirus pandemic continued to wreak havoc on markets. 30-share BSE index settled 2,713.41 points or 7.96 per cent lower at 31,390.07. Likewise, broer NSE Nifty gave up 9,200 level, slumping 757.80 points or 7.61 per cent to close at 9,197.40. Many analysts, over past week, have said RBI has legroom to cut rates to tune of 65 bps by June and have also spoken about likelihood of an inter-meeting cut (before April 3 policy meeting).