Inflation could decline further, settle below 4% by H2FY21, says Shaktikanta Das
Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday (April 17) addressed the media. This is the RBI Governor's second press briefing since the coronavirus COVID-19 outbreak began in India. In his previous address on March 27, he had announced a rate cut of 75 basis points.
Key take away from RBI governor Shakthikantadas today’s address :
- LCR requirement of banks brought down to 80% from 100%; to be restored in phases by April next year.
- Banks not to make any further dividend payout in view of financial difficulties arising from COVID-19.
- 90-day NPA norm not to apply on moratorium granted on existing loans by banks.
- Repo rate remains unchanged.
- Economic activity came to standstill during the lockdown.
- Ways and means a limit of states raised to help them, not bunch up their borrowing plans.
- Rs 50,000 cr special finance facility to be provided to financial institutions such as Nabard, Sidbi, NHB.
- RBI to announce new measures to maintain adequate liquidity in the system, facilitate bank credit flow, ease financial stress.
- Surplus liquidity in the banking system has increased substantially as a result of central bank actions.
- No downtime of the internet or mobile banking during lockdown; banking operations normal.
- The contraction in exports in March at 34.6% much more severe than the global financial crisis of 2008-09.
- Automobile production, sales declined sharply in March; electricity demand has fallen sharply.
- Impact of COVID-19 not captured in IIP data for February.
- India is expected to post a sharp turnaround in 2021-22. IMF projection of 1.9% GDP growth for India is highest in G20.
- Banks, financial institutions have risen to occasion to ensure normal functioning during the outbreak of the pandemic.
- RBI monitoring situation developing out of COVID-19 outbreak.
- LTRO-2.0 to involve Rs 50,000 cr to begin with.
- For 2020-21, International Monetary Fund projects sizable reshaped recoveries, close to 9 percentage points for the global GDP. India is expected to post a sharp turnaround & resume its pre-COVID, pre-slowdown trajectory by growing at 7.4% in 2020-21.
- Since March 27, the macroeconomic and financial landscape has deteriorated precipitously in some areas, but light still shines through bravely in some others.