RBI Policy Rate Cut

In the world of finance, a moratorium is a temporary suspension of an activity in response to sudden financial hardships

Anarock Chairman Anuj Puri said RBI's move will push credit flow into all industries reeling under the impact of the coronavirus

The three-month moratorium on payments of term loan instalments (EMI) and interest on working capital give much-desired relief, she added

While working from home, bond traders are doing bare minimum trade to cover their positions; there is also the expectation of a 50-150-bp rate cut

RBI's next move will depend on the Budget

Repo rate now stands at 5.15%, lowest in nine years. A sixth cut this year would mark the longest streak of consecutive rate cuts since the current interest rate framework was introduced 20 years ago

The MPC has also brought down the projection of GDP growth of 6.9 per cent from 7 per cent, which is not significant but definitely does affect sentiment

The rupee had opened on a weak note at 70.92 at the interbank forex market, then fell further to 70.99 against the dollar

The economy has been buffeted by the worsening trade relations between the United States and China

The RBI surprisingly cut its key lending rate by 0.25% to 6.25% as it sought to up the sagging growth amid a slowdown in inflation at its Feb 7 policy meet

Risk of inflation, especially from crude oil prices, will continue to draw emphasis and be a major factor. A hike is not at all warranted.

Says Q2 growth at 6.3% was weaker than expected

However, weakness in the economic growth, as measured by the gross value added (GVA), could be a strong incentive to cut rates, but that would fan the inflation further

Reverse repo rate stays at 5.75 percent

Job generation, tax revenue and public expenditure programmes depend on the revival of growth

Another 25 bps cut looks likely on the cards in the second half of the year.

Higher rural incomes, pay commission benefits, lower interest rates key positives: Analysts

The 0.25% lowering of the repo rate to 6% comes after a 10-month period

Indian economy is at a point of inflection, hence a rate cut was needed, expect another cut

RBI has been mopping up liquidity from market using cash management bills, open market sale of bonds