Thread by @Sanju_Verma_

#RBI cut by 40bps each of these👇
#Repo rate to 4%
#ReverseRepo to 3.35%
#BankRate to 4.25%

Decision was reached after 5:1 vote,with #ChetanGhate,lone voice calling for 25 bps cut

#MPC meet was held ahead of schedule from 3rd-5th,June

#EMI #moratoroum extended by 3 more months

Moratorium extension till 31st August 2020,is both timely &reflective of @narendramodi govt's alacrity--Big relief to #MiddleClass

Measure to convert #moratorium interest payment into #TermLoan payable in FY21,is helpful

This will reduce #NPAs &stress on banks' balance sheets

#RBI's cut in #Repo will reduce cost of funds&extension of #moratorium will be supportive of financial stability;#Rates across #YieldCurve will move lower from current levels

Fall in #ReverseRepo rate will disincentivise banks from #hoarding #liquidity&coax them to lend

#Covid

A proactive policy by #RBI

Extension of #moratorium& converting accumulated interest into #TermLoans will increase #payback cycle

#Swap facility for #EximBank, extension of import payments& increasing exporters' length of credit to 15 months from 1yr,are timely

#RBIPolicy👍

#RBI has also given 15000Cr line of credit to #EXIMBank for 90 days to meet its foreign currency needs

This line of credit comes with #rollover of up to 1yr,to enable it to avail US dollar #swap facility

Steps by RBI today,are over&above Rs8.01 lakhCr of measures,already taken!

#RBI will also rollover 15000Cr of special #refinance facility,given to #SIDBI earlier,by 90 more days,making it 180days in all

Good thing about #RBIPolicy is, #Accomodative stance is retained,so that #liquidity in system is easy

#Inflation projected to fall below 4% in 2HFY21

Extending pre&post shipment credit period for #exporters to 12 months &increasing #import remittances period from 6 to 12 months,are other big positives of #RBIPolicy

Also,#FPIs have been given leeway of 3 more months,for 75% utilisation of existing investment limits

#COVIDー19

Hike in corporate group #exposure limit from 25 to 30%,is a brave move,to instill more #Risk appetite &dilute acute risk aversion,prevalent in the system

With 135bps #Repo cut in 2019&115bps in 2020,RBI has gone for the jugular

March 2020 #Inflation revised from 5.91 to 5.84%

.@INCIndia often compares today's situation with 1991

In 1991,India's #Forex reserves@ $1.2bn,enough to cover only 3 weeks of #Imports,forced us to pledge 46.91 tonnes of #Gold with #BoE,to raise meagre $400mn

Today India's Fx reserves@$487bn, can service 52 weeks of imports💪

#Repo rate of 4%,after today's cut of 40bps is the #Lowest ever in last 20 yrs;Lowest prior to this was 4.25%& #Highest,14.5%

#ReverseRepo,after today's 40bps cut is 3.35%;Lowest in last 20 yrs was 3.25&highest,13.5%

Big fall in #InterestRates will power growth,in #Covid times