RBI guv says COVID-19 could impact India through trade channels, announces measures to mitigate effect

Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said Covid-19 could impact India directly through trade channels, even though the Indian economy was relatively insulated from the global value chain. He also announced measures to mitigate the ramifications of coronavirus outbreak on the economy.

The central bank chief, while addressing the media in New Delhi, said that the RBI has proposed to conduct another six months USD sell/buy swap on March 23 to provide liquidity to markets, adding, "to further improve monetary transmission, RBI will conduct long-term repo operation (LTRO) in multiple tranches upto Rs 1,000 crore at policy rate."

RBI has been taking calibrated measures in the past few days, and has several policy instruments at its command and stands ready.

"Second round of effects of the pandemic could operate through a slowdown in the domestic economic growth and it would obviously be a result of synchronised slowdown in global growth and as a part of that, the growth momentum in India would also be impacted somewhat," Das added.

"I am not ruling out any possibility," Das said, when asked about the anticipated rate cut. He, however, did not announce any rate cut.

RBI, Das said, has been monitoring the situation, and an announcement will only be made after further assessment.

The coronavirus pandemic originated in China, but the epicentre has now moved to Europe. Italy and Spain are the worst-hit, forcing both the nations to go on complete lock-down.

Since the oubreak in mid-November last year, over 6,500 people have been killed.