‘Large Part of Global Economy May Slip Into Recession’: RBI Guv

RBI Chief predicted a big global recession and said India will not be immune.

RBI Governor Shaktikanta Das.

(Photo: PTI)

Shaktikanta Das on Friday, 27 March, spoke of a likely big global recession and said India will not be immune to it. It all depends on how India responds to the situation, he said.

"The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic. There is a rising probability that large parts of the world will slip into recession," he added.

“MPC noted that global economic activity has come to a near stand-still as COVID-19 related lockdowns and social distancing in affected countries. Expectations of a shallow recovery in 2020 from 2019’s decade low in global growth have been dashed.”

Shaktikanta Das, Governor, Reserve Bank of India

Global slowdown could make things difficult for India too, despite some help from falling crude prices, Das said, adding food prices may soften even further on record crop production.

Aggregate demand may weaken and ease core inflation further, he noted.

Talking about the growth, Das said, "projections of growth depend entirely on the intensity, spread and duration of the Coronavirus."

He also added that this kind of uncertainty towards the growth outlook has never ever happened before.

"This is unprecedented," Das said.

“Banking system in India is safe, deposits safe in private bank. Public should not resort to panic withdrawal.”

Shaktikanta Das, Governor, Reserve Bank of India

The RBI on Friday put on hold EMI payments on all term loans for three months and cut interest rate by steepest in more than 11 years as it joined the government effort to rescue a slowing economy that has now got caught in coronavirus whirlwind.

The Reserve Bank of India (RBI) cut repo to 4.4 percent, the lowest in at least 15 years. Also, it reduced the cash reserve ratio maintained by the banks for the first time in over seven years. CRR for all banks was cut by 100 basis points to release Rs 1.37 lakh crore across banking system.

The reverse repo rate was cut by 90 bps to 4 percent, creating an asymmetrical corridor.

“Tough times never last, only tough people and institutions do. The RBI is at work and at mission mode. Will do everything required to mitigate the effects of Covid-19 pandemic.”

Shaktikanta Das, Governor, Reserve Bank of India

(With inputs from PTI & ANI)