Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday said that the novel coronavirus pandemic is so far the “biggest test of robustness and resilience of our [India’s] economic and financial system”.
“Coronavirus pandemic perhaps represents so far the biggest test of robustness and resilience of our economic and financial system,” Shaktikanta Das said.
In his keynote address at the 7th SBI Banking and Economics Conclave, Shaktikanta Das said that the Monetary Policy Committee (MPC) has decided to cumulatively cut the Policy repo rate by 115 basis points. “So from February 2019, the total rate cut that RBI has undertaken is 250 basis points,” he said.
He said that the RBI had cut the Repo rate by 135 basis points February 2019 onwards in an attempt to tackle the slowdown in growth which was visible at that time.
“From February 2019 onwards, on a cumulative basis, we had cut the Repo rate by 135 basis points till the onset of the coronavirus. That was done mainly to tackle the slowdown in growth which was visible at that time and we had elaborately touched upon its in our MPC Resolutions,” Shaktikanta Das said.
“The lagged impact of these measures was about to propel a cyclical turnaround in economic activity when Covid-19 brought with it calamities, miseries, endangering of lives and livelihood of people,” Shaktikanta Das said.
Shaktikanta Das further termed the pandemic as “the worst health and economic crisis in the last 100 years with unprecedented negative consequences for output, jobs and well being”.
“It dented the existing world order, global value chains, labour and capital movements across the globe,” Shaktikanta Das said.
In such a situation, Shaktikanta Das said: “The topmost priority for the RBI is growth and financial stability is equally important. The RBI has strengthened its offsite surveillance mechanism to identify emerging risks.”
“RBI is engaged with all stakeholders for resolution for Punjab and Maharashtra Cooperative Bank,” Shaktikanta Das further said.
(With inputs from ANI, PTI)