Covid-19 is the worst health and economic crisis in the past 100 years with unprecedented negative consequences for production, employment and well-being, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Saturday.
“The pandemic has shaken the existing world order, global value chains, the movement of labor and capital across the globe,” Das said while addressing the 7th SBI Banking and Economics Conclave via video conference .
Das said the pandemic was perhaps the biggest test of the robustness and resilience of “our economic and financial system” to date.
Also Read: Indian Government Had 5.73 Billion Rs In Outstanding RBI Loans As Of Week 3 Of July
The RBI governor said that between February 2019 and the onset of Covid-19 in the country, the repo rate was reduced by 135 basis points on a cumulative basis. This decision was taken primarily to combat the slowdown in growth that was visible at the time, he said. Das added that such measures would have had a positive impact on the country’s economic activity but the coronavirus crisis followed.
“The delayed impact of these measures was on the verge of propelling a cyclical turnaround in economic activity when Covid-19 resulted in calamities, misery, endangering people’s lives and livelihoods,” said he added.
Das said the six-member Monetary Policy Committee (MPC) has decided to cumulatively reduce the repo rate by 115 basis points.
“So as of February 2019, the total rate cut that RBI has undertaken is 250 basis points,” Das said.
It comes a day after an RBI report said on Friday that the government had 5.73 billion rupees ($ 76.16 million) in outstanding central bank loans and means during the week ended July 3.
The central government had no outstanding loans the week before, Reuters news agency reported.
State governments obtained 70.04 billion rupees in loans from the RBI in the week ending July 3, up from 34.16 billion rupees the week before, the statement said.