To help the country’s exporters and importers amid induced by the global coronavirus crisis, Reserve Bank of India(RBI) Governor Shaktikanta Das on Friday announced a slew of measures. Das said in a statement that the monetary policy committee unanimously decided to slash the repo rate with a 5:1 majority voting in favor of a 40 basis-point reduction to 4 percent. Also reverse repo was brought down to 3.35 percent. On Friday, RBIs stance on inflation and outlook on GDP was also revealed.
RBI announced a few measures to help the export-import sector, amid the COVID-19 pandemic. Some of the decisions that should help the foreign trade sector are the following:
For disbursements made up to July 31, 2020, the Reserve Bank of India decided to increase the permissible period of pre-shipment export credit sanctioned by banks from the existing one year to 15 months. This is to help exporters support their production and realization cycles. Instead of one year, any exporter who has taken credit from a bank can repay it in 15 months. As businesses have taken a serious hit due to COVID-19, the additional three months will come as a relief to exporters.
Liquidity for Exim Bank of India
For a period of 90 days, RBI extended the Rs15000 crore line of credit to the Exim Bank to enable it to avail of a US dollar swap facility. This means that Exim Bank will have an additional Rs 15,000 crore at its disposal to lend to businesses.
Extension of time for payment for imports
To the importers also RBI has provided some relief. Due to the coronavirus pandemic, operating cycles have been disrupted for all businesses and thus RBI has extended time for completion of outward remittances against normal imports into India from six months to twelve months from the date of shipment for such imports made on or before July 31, 2020.
Thus, RBI has given importers and exporters a huge relief at this time, when the global economy is facing uncertainty. These decisions and measures will help them in mitigating the impact of the pandemic.