The RBI’s Governor’s ‘bazooka’ announcement earlier today has seen the usually conservative institution and its head pull out the big guns in word and action.
In a never-before statement he said: “The time has come for the Reserve Bank to unleash an array of instruments from its arsenal to staunch and mitigate the impact of COVID-19, revive growth and, above all, preserve financial stability." Here is an attempt to decode it for you.
To keep the wheels of the economy turning, the RBI has taken four key steps. One, increase the liquidity in the system Two, make sure the lower policy rate is transmitted.
Three, give a three-month window for a payback on all term loans. Four, take steps to reduce volatility and provide stability.