Prime Minister Narendra Modi on Friday said the Reserve Bank of India (RBI) had taken giant steps to safeguard the economy from the impact of the coronavirus.
The RBI cut the benchmark interest rate by 75 basis points to 4.4 per cent on Friday to deal with the hardship caused due to the outbreak of COVID-19.
"The announcements will improve liquidity, reduce cost of funds, help middle class and businesses," Modi wrote on Twitter.
Today @RBI has taken giant steps to safeguard our economy from the impact of the Coronavirus. The announcements will improve liquidity, reduce cost of funds, help middle class and businesses. https://t.co/pgYOUBQtNl— Narendra Modi (@narendramodi) March 27, 2020
The central bank has put on hold EMI payments on all term loans for three months and cut interest rate by steepest in more than 11 years as it joined the government effort to rescue a slowing economy that has been hit by the coronavirus.
Further, it reduced the cash reserve ratio maintained by the banks for the first time in over seven years. CRR for all banks was cut by 100 basis points to release Rs 1.37 lakh crore across banking system.
The liquidity measures announced include auction of targeted long-term repo operation of 3-year tenor for the total amount of Rs 1 lakh crore at floating rate and accommodation under Marginal Standing Facility to be increased from 2 per cent to 3 per cent of Statutory Liquidity Ratio (SLR) with immediate effect till June 30.
Combined, these three measures will make available a total Rs 3,74,000 crore to the country's financial system.
(With PTI Inputs)