Reserve Bank of India (RBI) Governor Shaktikanta Das held a press conference on March 16. Das made two key announcements aimed at infusing liquidity into the economy and financial markets: another 6 months US dollar/ Rupee sell-buy swap on March 23 and Long-Term Repo Operations (LTRO) in multiple tranches up to a total amount of Rs 1 lakh crores at the policy rate (to be followed by a review of performance of LTRO).
There was widespread speculation that an emergency inter-meeting interest rate cut may be announced in line with global peers as the rapid spread of the deadly coronavirus has triggered heightened risk of deterioration in global growth.
The RBI's regular monetary policy review is scheduled for March 31 to April 3, 2020. Earlier today, the US Federal Reserve slashed key rates for the second time in less than two weeks, bringing it to virtually zero. It also launched a massive $700 billion quantitative easing programme to stave off a potential recession. Central banks of other countries such as England, Australia, New Zealand and the European Union have already cut rates.
In a release dated March 16, the RBI has also advised all banks in the country to devise a strategy and a mechanism to monitor the spread of the coronavirus within their respective organisations.
The RBI also said that there is a need for all banks to ensure timely intervention in order to prevent the spread of the infection in the event that a positive case (infected employee) is detected.
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