f there is one entity that has earned the respect of a very cynical and hard-to-please group of people – stock and bond dealers, people in the financial sector and economists – it is the Reserve Bank of India (RBI) under the governorship of Shantikata Das. The confident body language, the measured speech and the emphatic statements about doing what it takes to beat the economy back into shape are in stark contrast to a fumbling finance minister – Nirmala Sitharaman – whose body language largely based on unfamiliarity with financial market terms and concepts, does not instill the same sense of comfort and confidence that Das does.
On 22 May, Das, at his favourite time of 10 am, announced another set of measures to deal with the covid crisis. An earlier than scheduled Monetary Policy Committee (MPC) meeting was held to cut repo (the rate at which banks borrow from the RBI) and reverse repo (the rate at which banks lend to the RBI) rates by 40 basis points. This means that banks can both borrow from and lend to the RBI at lower rates of 4% and 3.35%.