INSUBCONTINENT EXCLUSIVE:
borrowing costs down and boost demand in an economy on course for its weakest expansion since 2009.
The Reserve Bank of India offered to
inject as much as $14 billion cash through one- and three-year funding operations, akin to the long-term repos put in place by the European
It also relaxed bad-loan norms for some small borrowers and eased reserve requirements for select lending on Thursday, while keeping the
bank has several instruments at its command that it can deploy to address the challenges the Indian economy faces in terms of sluggishness
securities and selling short-term bonds
borrowing costs in check after a shock spike in inflation forced the MPC to pause on rate cuts
at TD Securities in Singapore
18 basis points to 5.82 per cent and that of the 3-year notes declining by a similar margin
Yield on the benchmark 10-year bonds was down by 5 basis points.
Mild RecoveryThat drop in bond yields should translate into lower borrowing
costs and help underpin the green shoots emerging in the economy.
Growth in the year starting April is expected to rebound to 6 per cent
from an estimated 5 per cent in the current fiscal year, according to the RBI
This should pull down headline inflation in the months ahead -- opening up space for the RBI to resume cutting rates to spur a recovery in
the economy.
-- Abhishek Gupta, India economist
The RBI flagged downside risks to growth from the coronavirus, saying the pandemic may
and services sectors are rebounding after a slump
A global slowdown could impact exports which have been rather sluggish.
On Wednesday, central banks across Southeast Asia signaled strong
policy action to counter a hit to their economies from the viral outbreak
The Bank of Thailand cut its benchmark interest rate to a record-low, while Singapore signaled there was room for the currency to ease
Bank Indonesia Governor Perry Warjiyo said the central bank will keep policy accommodative this year.
