Reserve Bank of India Slashes Interest Rate to 4.40% Amid COVID-19 Impact

[Asia Economy Reporter Joselgina] The Reserve Bank of India (RBI) has significantly cut the benchmark interest rate to mitigate the economic impact caused by the spread of the novel coronavirus disease (COVID-19).

According to local media such as The Times of India, on the 27th (local time), the Reserve Bank of India held an emergency meeting and lowered the repurchase agreement (repo) rate, used as the benchmark interest rate, from 5.15% to 4.40%, a 75 basis points (1bp=0.01 percentage point) cut. This is the lowest level since March 2010.

Originally, the Reserve Bank of India planned to hold a monetary policy meeting in early next month, but due to concerns over economic contraction caused by the spread of COVID-19, it convened an emergency meeting.

India has imposed a nationwide lockdown for 21 days starting from the 25th to respond to the spread of COVID-19. Barclays UK expressed concerns that this measure could cause an economic loss of approximately $120 billion to India. The day before, the Indian government announced it would release 1.7 trillion rupees to support vulnerable groups. As of this date, the number of confirmed COVID-19 cases in India is 724.

This content was produced with the assistance of AI translation services.