New Delhi: Prime Minister Narendra Modi on Friday lauded the Reserve Bank of India (RBI) after the central bank, earlier today, announced a series of measures aimed at reviving the struggling economy amid the COVID-19 pandemic. Also Read - Tamil Producer V Swaminathan Passes Away Due to COVID-19 at 62 in Chennai
“Today’s announcement by the RBI will greatly enhance liquidity and improve credit supply. These steps would help our small businesses, MSMEs, farmers and the poor,” PM Modi tweeted. Also Read - Serum Institute to Make Coronavirus Vaccine Available by End of This Year, Price at Less Than Rs 250 Per Dose
“It will also help all states by increasing WMA limits,” he added. Also Read - Ahead of Sadak 2 Trailer, Makers Unveil Intriguing Character Posters of Alia Bhatt, Aditya Roy Kapur, Sanjay Dutt
WMA, notably, stands for Way and Means Advances, which is a credit policy to provide state governments with cash flow issues. It was increased by 60%.
In a video conference earlier today, RBI Governor Shaktikanta Das announced a cut in reverse repo rate of 25 basis points, from 4% to 3.75%, as he addressed his second press conference during the lockdown and first since the lockdown was extended till May 3, on what was to be its original last day.
Reverse repo rate was cut in the previous press conference as well, on March 27, on the third day of the original three-week lockdown, by 90 basis points.
It is the rate at which the RBI borrows from commercial banks and is a monetary policy tool that can be used to control supply of money in the economy.
In his opening remarks today, Shaktikanta Das also projected a bright future for India, saying that despite the ongoing lockdown, India would revert to its pre-lockdown growth rate trajectory of 7.4% for 2020-21, once the lockdown comes to an end.