RBI MEASURES TO MAINTAIN LIQUIDITY: WE NEED TO BE BATTLE
READY
The RBI Governor, Shaktikanta Das, announced fresh measures
aimed at maintaining adequate liquidity in the system, facilitating
and incentivising banks to ensure better credit flow and enabling
normal functioning of the financial markets. Amongst other
measures, the RBI Governor reduced the reverse repo rate by 25
basis points to 3.75 per cent. The rate cut was warranted due to
the disruptive force of coronavirus.
The reduction of reverse repo rate by 25 basis points will
enable banks to open up the credit flow for economic activities,
instead of deploying funds with the central bank. This will boost
investor confidence and the quarterly numbers will no longer be a
horror story.
