- Tourism, airlines, hospitality, trade sectors suffering, says RBI chief
- RBI has several policy tools, is ready to act when required, he adds
- India has over 110 confirmed coronavirus cases so far
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The RBI will ensure that its policy actions are "considered and calibrated" as it moves to tackle risks to the economy from the coronavirus outbreak, said Mr Das. The RBI, he said, has several policy tools at its command and "stands ready" as and when required.
India has over 110 confirmed coronavirus cases as of Monday, with several hundred people in isolation as a precaution to help limit the spread of the disease.
"The Covid-19 pandemic... is rapidly evolving into a human tragedy disrupting economic activity in a wide swath of affected countries. Financial markets across the world are experiencing intense volatility and financial conditions have tightened worldwide," the RBI Governor added.
His remarks came within an hour of benchmark equity indices ending a highly volatile session around 8 per cent lower following a turmoil in global markets.
Hinting at further policy action ahead, the RBI chief said the central bank would decide on the timing of any interest rate action based on the "evolving situation". The RBI has several other policy instruments and tools that it can deploy, he added.
In a bid to boost liquidity in the system, the RBI announced another round of $2 billion dollar-rupee swap on March 23, and long-term repo operations worth Rs 1 lakh crore as and when the market needs it.
"Policy authorities have responded with emergency measures and more recently, advanced economies have coordinate large policy rate reductions," he said.
Overnight in the US, the Federal Reserve cut the key interest rate by 100 basis points to a target range of 0-0.25 per cent, saying that it would expand its balance sheet by at least $700 billion in coming weeks.
Already bearing the brunt of low consumer demand and a slowdown across sectors, India's GDP or gross domestic product expanded at a new six-year low of 4.7 per cent in October-December. Although the government has maintained that growth seems to have bottomed out and "green shoots" are visible in the economy, many believe the worst is not behind.
Official estimates peg overall GDP growth at 5 per cent in the financial year ending March 31 - the worst rate of annual expansion since the global financial crisis of 2008-09.