India’s RBI to Hold Briefing Amid Flurry of Asia Rate Cuts
India’s Central Bank Holds Briefing Amid Rate Cut Pressure
(Bloomberg) -- Reserve Bank of India Governor Shaktikanta Das will hold a press conference Monday, hours after the Federal Reserve slashed interest rates and triggered a wave of central bank action across Asia.
A central bank spokesman declined to give details of the press briefing scheduled for 4 p.m. in Mumbai.
Bonds rallied and stocks in India briefly pared losses amid growing expectations that the RBI, which has kept its benchmark interest rate unchanged this year, could opt for a reduction. The six member monetary policy committee cut rates by 135 basis points last year, but has been on hold since December after a spike in inflation above the bank’s 2%-6% target.
Central banks across Asia Pacific jumped into action Monday following the Fed’s surprise 1 percentage-point rate cut. New Zealand lowered rates by 75 basis points, while South Korea eased by 50 basis points.
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The Reserve Bank of India has already announced a $2 billion injection for the foreign exchange market to support the rupee as it fell to a record low. Officials have assured markets that the RBI will provide liquidity-- both rupee and foreign exchange -- to keep the local currency stable.
Central bankers around the world are responding to a worsening coronavirus outbreak that threatens to tip the world economy into recession. India is also dealing with its own domestic threats after the failure of one of the nation’s biggest private banks.
The sharp slide in oil prices will curb inflation and give the RBI space to ease once again. Even before the crisis at Yes Bank Ltd., Governor Das had signaled his willingness to do more to support the economy if needed.
The central bank has resorted to unconventional measures in recent months to pull down borrowing costs. It’s used a mix of the Federal Reserve-style ‘Operation Twist’ and the European Central Bank-like long term repo operations, or LTROs, to bring down term spreads and enable better transmission of rate cuts.
To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net
To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram
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