RBI to conduct another dollar/rupee sell-buy swap on Mar 23

The Reserve Bank of India (RBI) will conduct another six months US dollar/rupee sell-buy swap on March 23 to ensure that financial markets and institutions remain sound and resilient in the wake of deadly coronavirus (COVID-19), Governor Shaktikanta Das said on Monday.

It will also conduct long term repo operation (LTRO) in multiple tranches up to a total amount of Rs 1 lakh crore at the policy rate. This will be followed by a review of performance of LTRO.

"The RBI has been taking calibrated measures to stabilise financial markets. COVID-19 pandemic is a human tragedy. Financial markets are witnessing volatility. Efforts are being mounted against COVID-19 on a war footing," said Das.

The decision on interest rate cut will be taken by RBI's monetary policy committee (MPC) in the next meeting scheduled for March 31 to April 3, he added.

Das said the global economy is expected to witness a slowdown with growth rate declining between 0.4 to 1.5 per cent. India is relatively insulated from global value chain, but there will be some impact.

"We are estimating the impact of COVID-19 and we will give our growth estimates in the MPC."

Already, sectors like tourism, hospitality, airlines and others are being affected due to the virus outbreak and there is considerable uncertainty about the duration of pandemic.

"The RBI has several instruments at its command and stands ready to take all necessary measures to mitigate the impact of COVID-19 on the Indian economy," said Das.

The RBI governor said the central bank is also encouraging banks and customers to use digital banking facilities as far as possible while many people curb social contacts.

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