The Indian stock market plunged into bear territory on Thursday, with the blue-chip Nifty 50 sliding to its lowest in over two and half years, after the coronavirus outbreak was termed a pandemic and the United States suspended travel from Europe.
The markets recouped some losses after the news with Nifty 50 and S&P BSE Sensex down over 6 per cent, off day's lows of over 7.5 per cent.
The market has been expecting an off-cycle interest rate cut by the Reserve Bank of India but the source said no such step is being mulled at this point in time. Another official confirmed this.
"The RBI will look to push more liquidity in the market and ease repayment issues to sectors that have been disrupted by supply chains being broken down," the source said.
India's monetary policy committee is scheduled to meet on March 31, according to its website.
A rate decision is unlikely to be taken by the RBI before its scheduled meeting, both the officials said.
This year the RBI has not been able to cut its policy rates due to a sharp rise in retail inflation in the last few months.
But amid uncertainty about how the coronavirus will spread, the RBI said it would act accordingly and expressed its willingness to ease monetary policy further, while persistent high inflation could make it difficult for it to act.
The total number of confirmed cases of coronavirus rose to 73 in India, according to the government.