Indian shares were volatile in trading Friday after the central bank slashed interest rates to mitigate the coronavirus impact on the economy, following a meeting that was brought forward to this week.
The Nifty 50 index wavered between gains and losses: It traded up 0.38% at 2:27 p.m. HK/SIN after climbing more than 4% and then dropping 1% earlier in the session.Reserve Bank of India's Monetary Policy Committee met this week and cut the repo rate — or the rate at which it lends to commercial banks — by 75 basis points from 5.15% to 4.4% on Friday.
The Reserve Bank of India logo is displayed outside of the bank's headquarters in Mumbai, India, on Tuesday, Aug. 9, 2011.shares were volatile in trading Friday after the central bank slashed interest rates to mitigate the coronavirus impact on the economy, following a meeting that was brought forward to this week.index wavered between gains and losses: It traded up 0.38% at 2:27 p.m. HK/SIN after climbing more than 4% and then dropping 1% earlier in the session.
"After extensive discussions, the MPC voted for a sizeable reduction in the policy repo rate and for maintaining the accommodative stance of monetary policy, as long as necessary to revive growth, mitigate the impact of COVID-19 while ensuring that inflation remains within the target," RBI Governor Shaktikanta Das said in a press briefing.
The RBI also reduced the reverse repo rate — or the rate at which banks lend to the central bank — by 90 basis points to 4% to make it more unattractive for banks to "passively deposit funds with the Reserve Bank" instead of lending them to productive sectors of the economy, according to Das.Das added the current situation is "unprecedented" and that everything hinges on "the depth of the COVID-19 outbreak, its spread and its duration.