There is still more scope to cut the repo rate, that is, the loan can be cheaper

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Reserve Bank of India Governor Shaktikanta Das said that there is still scope for a cut in the repo rate. This means that in the future, the interest rates of loans from banks can be reduced further. Das also said that the central bank is capable of handling any situation and the country's banking system is strong. Addressing a webinar called 'Unlocked BFSI-2.0', Das said that the central bank has not yet fully utilized all the monetary policy options. He said that the stance on monetary policy will remain liberal.

This means that the Reserve Bank can further cut the repo rate if needed to increase the demand in the domestic market. He also said that the debt resolution framework will provide considerable relief to the creditors facing challenges due to Kovid-19.

Regarding the estimate related to the country's economic development, the central bank governor said that RBI does not have the facility to make an estimate today and then amend it later. He said that as soon as there is some clarity on Kovid-19, RBI will definitely start speculating on its own about economic growth.

Loss due to lending

The Governor of RBI warned banks that due to excessive caution in lending, banks will suffer. Doing so will affect their income. He said that instead of taking risks, banks should improve their risk management and governance framework.

Rupee's five-and-a-half month high due to Das's comment

The rupee's exchange rate rose on Thursday following RBI Governor Shaktikanta Das's comments on issues such as banks' position and interest rate. The value of one US dollar was reduced by 48 paise to Rs 73.82. This is the highest level of Indian currency in five and a half months. Earlier, the rupee had seen this level on March 11, 2020 against the US dollar. Despite the latest gains, the rupee has depreciated 3.31 percent so far this year.

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