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Key Rates Slashed: The Governor Announced A Reduction In The Repo Rate And The Reverse Rep

In a massive decision, the Reserve Bank of India has announced that banks are permitted to allow a 3-month moratorium on payment of instalments of all term loans outstanding on March 1, 2020. This dec

Written By
KAVYAE M
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In a massive decision, the Reserve Bank of India has announced that banks are permitted to allow a 3-month moratorium on payment of instalments of all term loans outstanding on March 1, 2020. This dec
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12:26 IST, March 27th 2020
Here's a summary of his announcements:

Key rates slashed: The Governor announced a reduction in the repo rate and the reverse repo rate. "The repo rate has been reduced by 75 basis points to 4.4 %. The reserve repo rate has been reduced by 90 basis points to 4%," Das said. The decision for "a sizeable reduction" in the policy repo rate, according to the RBI Governor was taken to "revive growth and mitigate the impact of COVID-19 and ensure financial stability." The Repo rate cut - which is the rate of interest at which banks borrow from RBI - will ensure banks have more access to funds, while the Reverse-Repo rate cut will make it less attractive for banks to park their funds with the central bank.

 

 

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12:26 IST, March 27th 2020
Measures also announced to ensure liquidity

his is a part of the Central Bank's measures to counter the Coronavirus lockdown, which had started off with the RBI governor announcing massive slash in the key repo rate to 4.4%, to revive economic growth. Measures have also been announced to ensure liquidity.

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