RBI extends moratorium on loan repayments by three more months to August 31

New Delhi: Reserve Bank of India (RBI) on Friday announced extension of loan moratorium by 3 more months to August 31.

Loans on all tenures have now been extended from June 1 till August 31, RBI Governor Shaktikanta Das said

The RBI reduced the repo rate – by 40 basis points from 4.4 percent to 4 percent while the reverse repo gets adjusted to 3.35% from 3.75%.

Shaktikanta Das addressed a press conference announcing measures to ease the financial stress caused by the COVID-19 pandemic. This is his third press conference (the other two being on March 27 and April 17).

Revenues have been impacted severely due to slowdown in economic activity amid COVID-19 outbreak, Das said.

He added that headline inflation may remain firm in first half of the year and ease in second half, falling below 4% in Q3/Q4 of FY21.

The RBI Governor said that GDP growth in 2020-21 will be in negative territory. 

“India seeing collapse of demand; dip in electricity, petroleum product consumption; fall in private consumption,” he said.

Combination of fiscal, monetary and administrative actions will create conditions for revival of economy in 2nd half of FY21, Das said.

He also added that inflation outlook is highly uncertain. “Elevated level of inflation in pulses worrisome, requires review of import duties,” he said.