RBI refrains from giving growth, inflation outlook; says current GDP projections at risk
The Reserve Bank of India (RBI) on Friday refrained from making any projections for growth and inflation saying the performance of these two key macroeconomic parameters in the days ahead would depend upon the intensity, spread and duration of COVID-19.
Announcing the decisions of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das said that no projection for growth and inflation was being given in view of the uncertainty created by outbreak of the deadly novel coronavirus (COVID-19).
Das further said that the growth projection of 4.7 percent for the fourth quarter of 2019-20 and 5 percent for the whole fiscal was at risk.
On the global economy, the governor said that slowdown could deepen impacting the growth prospects everywhere in the world.
As regards India, Das said, growth and inflation would be contingent on intensity, spread and duration of COVID-19.
The Reserve Bank in its monetary policy usually provides projections for growth and inflation.
RBI has also put on hold EMI payments on all term loans for three months and cut interest rate by the steepest in more than 11 years as it joined government efforts to rescue a slowing economy that has now got caught in coronavirus whirlwind.
The Reserve Bank of India (RBI) cut repo to 4.4 percent, the lowest in at least 15 years. Also, it reduced the cash reserve ratio maintained by the banks for the first time in over seven years. CRR for all banks was cut by 100 basis points to release Rs 1.37 lakh crore across banking system.
The reverse repo rate was cut by 90 bps to four percent, creating an asymmetrical corridor.
RBI Governor Shaktikanta Das predicted a big global recession and said India will not be immune.
"It all depends on how India responds to the situation," he said.
Global slowdown could make things difficult for India too, despite some help from falling crude prices, Das said, adding food prices may soften even further on record crop production.