IndianEra > Business > RBI Extends Moratorium on Loans Until Aug 2020

The Reserve Bank of India (RBI) appeared before media once again for the third time since March 25, 2020.

Addressing the media on May 22, 2020, RBI Chief Shaktikanta Das announced a slew of measures in view of the extended lockdown period.

RBI has cut the repo rate by another 40 basis points to 4 percent and extended moratorium on all loans by another 3 months.

The loan moratorium will continue until August 31, 2020.

With this, the extension period of loan moratorium totaled 6 months since the first announcement in March 2020.

“Even though the lockdown may be lifted by end-May with some restrictions, economic activity even in Q2 may remain subdued due to social distancing measures and the temporary shortage of labor,” says the RBI Chief.

He added that the economic recovery will only begin in the third quarter and gains momentum in Q4 as supply chains start becoming normal.

RBI Governor Shaktikanta Das

Das says inflation will be ‘highly uncertain’, with an unusual spike in food inflation in April expected to be moderate this time.

“The forecast of normal monsoon also portends well for food inflation,” he noted.

The Central Bank also extended the export credit limit from 12 months to 15 months.

In its additional support to the trading activity, support to the Export-Import (EXIM) bank, the bank announced an additional Rs. 15,000 crore line of credit.

Meanwhile, the country’s foreign exchange reserves have increased by 9.2 billion in the current fiscal since April 01, 2020.

So far, the forex reserves in FY 2020-21 have reached USD 487 billion.

Overall, the country has seen a fall in overall demand for electricity and petroleum products, and private consumption, among others.

Nirmala Sitharaman

Meanwhile, the Finance Minister Nirmala Sitharaman has also scheduled a meet with CEOs of all public sector banks today, to discuss ways for economic revival.


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Posted by IndianEra, 24/05/2020