INSUBCONTINENT EXCLUSIVE:
reduction in interest rates as the Covid-19 impact on economy and financial markets could be enormous
They also signalled that the central bank could deploy many tools at its disposal beyond interest rates to fuel demand revival and stabilise
financial markets.
While one independent member, Ravindra Dholakia, was in favour of aggressive policy initiatives along with RBI members,
policy by itself may not be effective in mitigating the crisis created by Covid-19 in a demand-deficient economy like India, said a member
of the panel, recommending a smaller rate cut.
Ghate had voted for only a 50 bps cut, while calling for wider structural reforms along with
will be akin to pushing on a string
professor at the Indian Statistical Institute (ISI).
Another external member, Pammi Dua, also voted for a repo rate cut of 50 bps, but had
said.
The central bank reduced the benchmark repo rate to a record low of 4.4 per cent on March 27.Defending the RBI decision, governor
Shaktikanta Das said that monetary policy needs to proactively arrest any deterioration in aggregate demand, and create enabling conditions
for businesses to normalise production and supply chains.
