The Reserve Bank of India (RBI) delivered a surprise on 27 March as it announced a series of measures that would be critical in assisting the micro, small, and medium enterprises (MSMEs) through the present lockdown caused by the coronavirus pandemic.
These measures include substantial rate cuts (75 basis points for the repo and 90 basis points for the reverse repo) along with liquidity enhancement measures such as long-term repo operations, a reduction in cash reserve ratio (CRR) levels to the lowest since 1962, and more significantly, advising banks to announce a moratorium on term loans for three months.
We got policy researcher Karan Bhasin to give his take on the central banker's decisive moves.
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