Indicating further cuts in interest rates, the Reserve Bank of India (RBI) on Thursday said that measures taken to save the economy from the COVID-19 epidemic will not be removed soon. RBI Governor Shaktikanta Das said in a program that whether the rate cut or other policy steps, the arrows of our quiver are not over yet. He said that the banking system of the country is strong and stable. Even in this era of corona virus epidemic, the banking system of India has retained its capacity.
The Reserve Bank did not change the repo rates in the policy review released on 6 August. The central bank had earlier cut the policy rate by 1.15 percent in the last two meetings. Currently, the repo rate is 4 percent, reverse repo rate is 3.35 percent and MCF rate is 4.25 percent. At the same time, the RBI made a provision to provide loans equal to 90 per cent of the value of bank gold to provide relief to the people during the COVID-19 epidemic. Earlier this limit was 75 percent.
I am quite pleased to say that the Indian banking sector continues to be safe and stable: RBI Governor Shaktikanta Das (in file pic) today at a newspaper event pic.twitter.com/e2A1BkoDoO
– ANI (@ANI) August 27, 2020
Must proceed with caution
The RBI governor said that after the prevention of the epidemic, the economy will have to proceed with caution to get on the path of strength. Regarding the relief measures announced recently by the central bank, Das said, “By no means should one assume that the RBI will withdraw the measures soon.” With clarity, RBI will start making its forecasts on inflation and economic growth.
Bank merger a step in the right direction
He said that overall, the banking sector remains steadily strong and stable and the integration of public sector banks is a step in the right direction. Das said, “The size of banks is important, but efficiency is more important.” He said that banks will face stress, it is obvious, but more important is how banks react to challenges. Give and face it.
Rupee strengthened by RBI Governor’s statement
The rupee was positively impacted by the statement of Reserve Bank Governor Shaktikanta Das and in the afternoon trade, it rose 40 paise to 73.90 against the US dollar. The rupee had gained 40 paise to close at 74.30 on Wednesday. On Thursday, it had gone up to 74.36 in early trade against the US dollar.