RBI Gov begins his announcements.
MPC voted for a 75 Bips cut in repo to 4.4%
MPC voted for a 75 Bips cut in repo to 4.4%
Reverse repo cut by 90 bips to discourage banks to keep funds at RBI
Long awaited statement. The gov looks decisive and determined to do what it takes to fight this virus and the risks it creates for the economy.
He is saying: we don't know what the final impact of Covid will be. There is just uncertainty ahead. But we will do what it takes to win this war.
He says: need to shield domestic economy from the global recession that is sure to follow. This is a never before event. Need to reduce the macro economic impact. Banks must keep credit flowing. RBI and Sebi will work with participants to make the markets open and working
He says: It is time to unleash its arsenal to keep this economy going.
Never heard these words from RBI. Very forceful
Never heard these words from RBI. Very forceful
1. Liquidity measures. To ensure money keeps flowing.
TLTRO - targeted long term repos upto Rs 1 trillion at a floating rate linked to repo rate
25,000 cr first auction today
TLTRO - targeted long term repos upto Rs 1 trillion at a floating rate linked to repo rate
25,000 cr first auction today
2. CRR down by 100 basis points for one year
This is HUGE.
Rs 1.37 trillion freed up for banks to lend.
BIG!
This is HUGE.
Rs 1.37 trillion freed up for banks to lend.
BIG!
Min CRR balance from 90% to 80%
upto June 26 2020
upto June 26 2020
3. Hike the MSF from 2% of SLR to 3% with immediate effect. Applicable upto June 2020
Rs 1.37 trillion of liquidity under LAF window
Rs 1.37 trillion of liquidity under LAF window
Now he is talking about giving debtors a longer rope to have some elbow room to pay back their loans
No impact on credit history of borrowers due to their inability to pay back the loans
Financial markets: permitting banks to participate in off shore derivative market - NDF market
(Reform at the time of crisis!)
(Reform at the time of crisis!)
Forward guidance:
RBI's liquidity injection 3.2% of GDP
"RBI will do what it takes to mitigate the economic impact of Covid
All instruments conventional and unconventional are going to be used"
Very decisive, emphatic and confidence inspiring
RBI's liquidity injection 3.2% of GDP
"RBI will do what it takes to mitigate the economic impact of Covid
All instruments conventional and unconventional are going to be used"
Very decisive, emphatic and confidence inspiring
"Do NOT confuse stock market volatility with bank safety. Your despots are safe - in PSU and private banks"
"This too shall pass.
Stay clean. Stay safe. And go digital"
Stay clean. Stay safe. And go digital"
RBI says: EMIs are covered for the three month push back. This means that your credit score will not suffer if you cannot meet your home loan EMI for three months.
This is big for the unorganised sector who had these loans. Does not mean that those who can pay stop paying.
This is big for the unorganised sector who had these loans. Does not mean that those who can pay stop paying.
RBI says: ALL retail loans are covered.
Advice for the salaried who continue to get their money each month - do NOT stop paying your EMIs. This is for those whose incomes are hit - the taxi driver, the consultant, the hair dresser - a whole swathe of population who is hit badly
Advice for the salaried who continue to get their money each month - do NOT stop paying your EMIs. This is for those whose incomes are hit - the taxi driver, the consultant, the hair dresser - a whole swathe of population who is hit badly
So sorry, INDIAN DEPOSITS are safe. Despots finally won't be - whether in China or elsewhere!
Credit cards are NOT included in the 3 month window. Only TERM loans.
