RBI Governor Shaktikanta Das Calls For Fiscal Measures To Support Economy

RBI Governor Shaktikanta Das Image Source (PTI) - Sakshi Post

MUMBAI: India’s central bank Governor Shaktikanta Das underlined the need for fiscal measures to support the economy, saying a slippage in budget gap target was unavoidable amid the coronavirus crisis.

Meeting the fiscal gap goal for the financial year started on April 1 — 3.5% of gross domestic product — was very challenging and he expects the government to make a judicious call on managing the deficit.

The Reserve Bank of India Governor mentioned in an interview that the government will probably miss its fiscal deficit target of 3.5 per cent of GDP in financial year 2021 owing to the COVID-19 pandemic.

The government is working on an economic package to tackle the impact of the virus, Das told Cogencis newswire in an interview whose transcript was released by the Reserve Bank of India on Monday.

Meanwhile, the Reserve Bank of India provided a Rs 50,000-crore shot in the arm to stressed mutual funds by unveiling a special liquidity facility for the sector.

The Rupee opened higher against the US dollar but was weighed down after comments from the RBI governor. Forex traders, however, said Reserve Bank of India Governor Shaktikanta Das' comment on fiscal deficit weighed on the rupee sentiment.

According to Devarsh Vakil, Head Advisory, HDFC Securities, RBI governor's comments "dampened the sentiment for rupee bulls.'' Vakil further noted that "the fall in rupee might be temporary as we will see dollar inflows of USD 5.7 billion from Facebook to buy a stake in Reliance Industries telecom unit. "

Meetings of major central banks this week raised hopes of more stimulus to counter the fallout from the coronovirus pandemic, traders said. (Source PTI)

Also Read: Rs 50k Crore Special Finance Facility For NABARD, SIDBI, NHB: RBI Gov

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