Economics
Deficit Funding to Rate Cuts Are India’s Options to Fight Virus
- Governor Das has signaled more rate cuts are likely in future
- Economists are calling for deficit financing to help economy
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India’s central bank has a number of policy options to draw upon to cushion the economic blow from the coronavirus pandemic.
With a limited fiscal response so far, the Reserve Bank of India has taken the lead in providing virus relief to the economy. It’s cut interest rates by 75 basis points, injected more than $50 billion of liquidity into the financial system, imposed a moratorium on loan repayments and relaxed some regulations on bad loans.