Reserve Bank of India (RBI) Governor Shaktikanta Das will hold a press conference at 4 pm on Monday. The announcement has set the markets talking that India’s central bank may announce a cut in key interest rates, on the lines of other central banks of the world.
RBI’s Monetary Policy Committee (MPC) usually meets to decide on rate hikes and cuts. It hadn’t had a formal meeting today till the filing of this report but as one official told Mint, “The MPC doesn’t need to meet formally for this." Needless to say, given the globally coordinated action by central banks in announcing rate cuts, RBI could also join the party.
A 25-basis-points-cut is a real possibility, though an economist Mint spoke to didn’t rule out that the Indian central bank could even make it 75 bps, given that US Federal Reserve on Sunday reduced its lending rates to zero and the Bank of New Zealand and Bank of Korea followed today with 75 bps and 50 bps cuts, respectively.
The next RBI policy meeting outcome is on 3 April. That meeting may still happen, assuming RBI cuts rates by 25 bps today and goes ahead with a similar reduction next month.
In an unprecedented move late on Sunday night, the US Fed slashed the interest rate by a steep 100 bps, bringing it down to zero. The Fed’s actions comes just within a fortnight of its previous one, taking its total cuts this year to about 150 bps.
Central banks across the world have come together to mitigate the impact of the coronavirus outbreak on global trade and economy.
According to data available on the website of John Hopkins University & Medicine, the virus has so far infected 169, 387 people across the world and left more than 6,500 dead. In India, the number of confirmed cases has risen to 113, while two have been killed.