GDP growth in 2020-21 likely to remain in negative: RBI Governor

Impact of RBI repo rate cut on borrowers depositors- who should do what

Das said the Indian economy had been impacted severely by the two-month nationwide lockdown meant to curb the spread of the virus.

With the reduction in the repo rate by 40 basis points to 4 percent, it is likely that the savings bank interest rates as well as fixed deposit rates in financial institutions will see a further downward movement. Assuming economic activity gets restored in a phased manner especially in the second half of this year, and taking into consideration favorable base effects, it is expected that the combination of fiscal, monetary and administrative measures being now undertaken both by the government and the RBI could create conditions for a gradual revival in activity in the second half of 2021.

Speaking about the food inflation, the RBI governor said that the food inflation which had eased from the January peak in February and March has now surged to 8.6 per cent in April.

The central bank will remain vigilant and in battle readiness to address dynamics of unknown future arising from COVID-19 outbreak, he added. It is being speculated that with the extension of the lockdown till May 31, the moratorium will be extended for a period of another three months. This will have a rollover facility to upto one year. The central bank has already pumped in more than US$50 billion (RM218.25 billion) into the financial system and announced targeted liquidity operations to support some sectors of the economy.

Das said that the monetary policy transmission has improved and added that improvement in passing lower rate to the borrowers has been noticed across various segments.

Das said while the global economy is heading into recession, the inflation outlook for India remains "highly uncertain". He said that there will be a gradual revival of activity and demand by the second half of FY21 and that it is essential to instill confidence at this point of time.

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The 34-year-old further informed the police that her mother and child were held by the actor until she arrived home. In 2011, he had some luck with short films and by 2013, he was cast in the film Bonnie & Clyde: Justified.

On inflation, Das said headline inflation may remain firm in the first half of the current financial year, and ease in the later part of the year. He said that the price of vegetables, oilseeds, and milk emerged as pressure points.

The RBI Governor also expressed hope that the inflation would be brought under control in the second half of the fiscal.

Speaking on the condition of the economy, the governor said that there has been a collapse in demand in both urban and rural demand since March 2020.

Volume of world trade can shrink by 13-32 percent this year, says RBI governor Shaktikanta Das.

The MPC voted 5-1 for a 40 bps repo rate cut. The Monetary Policy Committee held an out-of-cycle review meeting from May 20-22 and the policy stance was maintained "accomodative" until the growth revived.

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