The Central Bank of India reduced interest rates on Friday in order to combat the economic consequences of the rapidly spreading coronavirus which puts strains on the banking system of the country.

The Central Bank said it maintains an “accommodative” policy and will maintain it “as long as it is necessary” to revive growth, while ensuring that inflation remains within the target.

The Monetary Policy Committee of the Reserve Bank of India held a video conference this week to make a decision.

The committee has lowered the repo rate by 75 basis points to 4.40%, as expected. Reverse repo rate has been reduced by 90 basis points to 4%. Earlier this week the Prime Minister ordered nationwide lockdown which is expected to significantly slow economic activity in the second most populated country in the world.

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