New Delhi (IANS) Finance Minister Nirmala Sitharaman and Commerce Ministry Piyush Goyal applauded the Reserve Bank of India's (RBI) fresh slew of measures to ease liquidity and regulatory norms.
In a series of tweets, Sitharaman said that central bank's announcement would enhance liquidity and improve credit supply.
"Today's announcements by @RBI will greatly enhance liquidity and improve credit supply. These steps would help our small businesses, MSMEs, farmers and the poor. It will also help all states by increasing WMA limits," she tweeted.
Sitharaman said that along with maintaining liquidity, the steps has also been aimed at easing financial stress and enabling normal functioning of the markets.
"In view of the difficulties being faced due to #COVID19, the @RBI has taken a slew of steps aimed at maintaining adequate liquidity in the system, incentivising bank credit flows, easing financial stress, and enabling the normal functioning of markets," she posted.
Union Minister for Commerce and Industry Piyush Goyal also hailed the measures and said that the steps would also help India emerge as a world leader in the post-COVID world.
"Today's steps by RBI to support the economy will provide liquidity for growth & help India emerge as a world leader in a post COVID-19 world," Goyal said in a tweet.
He also noted that the RBI Governor's announcement to do "whatever it takes" is a massive confidence booster for the economy.
Further, sharing the steps taken by the RBI, Principal Economic Adviser Sanjeev Sanyal said that India has deliberately opted by a step-by-step feedback loop based approach that is different from the big-bang approach of some other countries.
"The step-by-step approach does not mean government/RBI does not recognize the seriousness of the situation or is unwilling to do big things. Remember, we will need some ammunition for the post-Covid reconstruction - hopefully not far away if we manage the health situation," he said in a tweet.
To mitigate the impact of economic fallout on financial liquidity due to Covid-19 pandemic, RBI Governor Shaktikanta Das on Friday announced a set of new measures including a reduction in reverse repo rate.
RBI has reduced the reverse repo rate by 25 basis points to 3.75 per cent of Liquidity Adjustment Facility (LAF). Further, he announced other measures such as going in for TLTRO 2.0 and re-financing facilities for critical institutions, along with other measures.