sunny.png
Sunday September 20th, 2020 5:15PM

India's central bank cuts lending rate to 4% to aid economy

By The Associated Press
Related Articles
  Contact Editor

NEW DELHI (AP) — India’s central bank on Friday cut its key interest rate to 4% to counter the blow to the economy from the coronavirus pandemic and a lockdown meant to contain it.

Reserve Bank of India Governor Shaktikanta Das forecast that the economy will contract in fiscal 2020-21. He did not give a specific figure. The IMF earlier forecast that India’s economic growth will fall to 1.9% in this fiscal year from 4.2% in 2019 and 6.1% in 2018. Some private sector economists expect it to contract by as much as 5%.

The Reserve Bank of India had reduced the interest rate to 4.4% from 5.15% in March to ease financing woes from the pandemic. The 4% rate announced Friday is the lowest the benchmark rate, the interest the central bank charges on lending to commercial banks, has been since March 2010.

In a policy meeting, the central bank said it would allow banks a 6-month moratorium on payments of installments on loans.

Das said data point to a collapse in demand in both the cities and the countryside, with plunging investment and consumer spending.

“High frequency indicators of service sector activity such as passenger and commercial vehicle sales, domestic air passenger traffic and foreign tourist arrivals also experienced sizeable contractions in March,'' he said.

India’s merchandise trade slumped in April 2020, with exports shrinking by 60.3% and imports by 58.6%. There was a glimmer of hope, however, in a bumper winter crop of wheat and forecasts for a normal monsoon season in June-September, he said.

Das's announcement followed the recent announcement of a 20 trillion rupee ($266 billion) fiscal and monetary package to support the economy. Millions of workers have fled cities after losing their jobs as authorities imposed lockdowns to curb the spread of coronavirus.

The restrictions are scheduled to last through the end of May, but some have been relaxed, with shops gradually reopening and manufacturing and farming resuming. Train services and public transport have been partially restored, and domestic flights are expected to resume at one-third of capacity on selected routes from Monday.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Industries, AP Business - Financial Services
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
India's central bank cuts lending rate to 4% to aid economy
India’s central bank on Friday cut its key interest rate to 4% to revive the economy severely hit the coronavirus outbreak and a two-month lockdown
1:31AM ( 6 minutes ago )
Texas court holds first US jury trial via videoconferencing
A court in the Dallas suburbs this week held what is believed to be the first American jury trial conducted over online video
1:31AM ( 7 minutes ago )
The Latest: UN again urges global cease-fire to fight virus
The United Nations secretary-general is again urging factions in conflict to heed his call for a global cease-fire to help tackle the COVID-19 pandemic
1:28AM ( 10 minutes ago )
Associated Press (AP)
Asian shares fall on US friction with China, Hong Kong fears
Shares are slipping in Asia as tensions flare between the U.S. and China and as more job losses add to the economic fallout from the coronavirus pandemic
11:56PM ( 1 hour ago )
Bank of Japan helps fund small businesses fighting pandemic
Japan’s central bank is providing some $280 billion to banks for financing small and medium-size businesses battling economic hardships brought on by the coronavrius pandemic
11:45PM ( 1 hour ago )
Flood raises fears of pollution at Michigan toxic waste site
A massive flood is raising fears of setbacks in a hazardous waste cleanup along a central Michigan river
11:36PM ( 2 hours ago )
AP Business
Key points about China's legislative session
Thousands of delegates from across China are attending the annual session of the country’s rubber-stamp legislature and its advisory body, meetings delayed by more than two months because of the coronavirus outbreak
10:37PM ( 3 hours ago )
China promises stimulus spending, sets no growth target
China’s top economic official has promised higher spending to revive its coronavirus-battered economy and curb surging job losses
10:03PM ( 3 hours ago )
The Latest: China reports 4 new confirmed virus cases
China has reported four new confirmed cases of the coronavirus
9:52PM ( 3 hours ago )
AP Business - Economy
Pandemic politics: Maskless Trump tours Michigan Ford plant
Pandemic politics have shadowed President Donald Trump’s trip to Michigan
10:18PM ( 3 hours ago )
Deadly cyclone cuts destructive path in India and Bangladesh
Wide areas of coastal India and Bangladesh are flooded and millions of people are without power after Cyclone Amphan struck the region
8:40PM ( 4 hours ago )
Pandemic politics: Maskless Trump visits Michigan Ford plant
Pandemic politics have shadowed President Donald Trump’s trip to Michigan
5:37PM ( 8 hours ago )
AP Business - Industries
Regional Fed chief: Loan program could aid a slow recovery
The president of a regional Federal Reserve bank that will oversee a groundbreaking business lending program says he thinks a slower-than-expected recovery from the economic downturn would lead companies to seek critical support from the program
8:53PM ( 1 day ago )
Regional Fed chief: A slow rebound would boost loan program
The president of a regional Federal Reserve bank that will oversee a groundbreaking business lending program said he thinks a slower-than-expected recovery from the economic downturn would lead companies to seek critical support from the program
4:28PM ( 1 day ago )
Mnuchin and Powell push differing priorities to aid economy
Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell offered Congress contrasting views of what the government’s most urgent priority should be
4:13PM ( 2 days ago )
AP Business - Financial Services
Texas court holds first US jury trial via videoconferencing
A court in the Dallas suburbs this week held what is believed to be the first American jury trial conducted over online video
1:31AM ( 7 minutes ago )
The Latest: UN again urges global cease-fire to fight virus
The United Nations secretary-general is again urging factions in conflict to heed his call for a global cease-fire to help tackle the COVID-19 pandemic
1:28AM ( 10 minutes ago )
China hikes defense spending by 6.6%, lowest rate in years
China will increase its defense spending by the lowest rate in years as it battles an economic crisis brought on by the coronavirus outbreak
1:00AM ( 38 minutes ago )
Trump lashes out at scientists whose findings contradict him
President Donald Trump has been lashing out at scientists whose conclusions he doesn’t like as he pushes to reopen the country during the coronavirus crisis
12:22AM ( 1 hour ago )
China boosts spending but no big steps for virus-hit economy
China’s top economic official has promised higher spending to curb soaring job losses but no massive stimulus on the scale of the United States and Japan for its coronavirus-battered economy
12:14AM ( 1 hour ago )