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RBI cuts repo, extends moratorium for 3 months; here's what it means according to experts

Updated : May 22, 2020 08:35 PM IST

The RBI on Friday cut rate by 40 basis points and with this repo stands at 4 percent and the reverse repo at 3.35 percent. The apex bank said the MPC remains accommodative, as it expects inflation to fall in the latter half of the year.  It said growth needs attention, since the GDP may contract this year. What do these changes mean?

RBI allowed lender to extend moratorium on loans by further 3 months or convert the unpaid interest into a working capital loan.

So does this suffice to pull out the economy from negative terrain? What more can RBI do? CNBC-TV18’s Latha Venkatesh is discussed with former RBI deputy governor SS Mundra, PNB's MD and CEO SS Mallikarjuna Rao, Shriram Transport Finance's CEO and MD Umesh Revankar, A Prasanna, chief economist at ICICI Securities and Pranjul Bhandari, Chief India economist at HSBC.

Watch this video for details
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