RBI extends Fixed Rate Reverse Repo, MSF window for flexibility in liquidity management

Amid dely Coronavirus pandemic in country that has caused alrey tumbling Indian ecomy to a standstill during nationwide lockdown, Reserve Bank of India (RBI) in order to facilitate liquidity manment, has extended Fixed Rate Reverse Repo and Marginal Standing Facility (MSF) window on Monday to provide eligible market participants with greater flexibility in ir liquidity manment.

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"In view of rapidly evolving financial conditions and taking into account impact of disruptions caused by COVID-19, it has been decided as an interim measure to extend window timings of Fixed Rate Reverse Repo and MSF operations to provide eligible market participants with greater flexibility in ir liquidity manment," RBI stated.

"As anunced in statement of Developmental and Regulatory Policies on March 27, Reserve Bank will conduct TLTROs of up to three years ter of appropriate sizes for a total amount of up to Rs 1,00,000 crore. first tranche of TLTRO for Rs 25,000 crore was conducted on March 27. It has w been decided to conduct ar TLTRO for Rs 25,000 crore," RBI said.

Goverr on March 27 anunced a reduction in repo rate and reverse repo rate.  Reserve Bank of India has also asked all lending institutions to allow a three-month moratorium on EMI payments in order to infuse liquidity into system. It has also allowed banks to defer interest on working capital loans for next three months.

" repo rate has been reduced by 75 basis points to 4.4 %. reserve repo rate has been reduced by 90 basis points to 4%," Das said. decision for "a sizeable reduction" in policy repo rate, according to RBI Goverr was taken to "revive growth and mitigate impact of COVID-19 and ensure financial stability," said RBI goverr.

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Repo rate cut - which is rate of interest at which banks borrow from RBI - will ensure banks have more access to funds, while Reverse-Repo rate cut will make it less attractive for banks to park ir funds with central bank.

In order to support ecomy amid Coronavirus crisis, RBI Goverr Shaktikanta Das said about Rs 3.74 lakh crore liquidity on an aggregate basis will be infused into financial system to deal with COVID-19 pandemic.

(With ANI inputs, Im source - PTI)