RBI governor told that sectors such as tourism, airlines, hospitality, and domestic trade and transport are suffering the loss of activity.
(Photo by Punit PARANJPE / AFP)
Governor of Reserve Bank of India, Shaktikanta Das on Monday said there will be impact on the Indian economy due to the deadly novel coronavirus as India is integrated to the global economy.
RBI governor told that sectors such as tourism, airlines, hospitality, and domestic trade and transport are suffering the loss of activity.
“Spillovers are being transported through finance and confidence channels to overseas and domestic equity markets. Forex and Bond markets are also not immune,” the governor told.
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“Second round of effects of the pandemic could operate through a slowdown in the domestic economic growth and it would obviously be a result of the synchronised slowdown in global growth and as a part of that, the growth momentum in India would also be impacted somewhat,” Shaktikanta Das said.
However, on Global Value Chain, the RBI governor maintained that India is relatively insulated from it, and said to that extent, impact on India will be less.
“But India is integrated to global economy so there will be some impact. We are evaluating and we will announce it when we hold Policy meeting,” he said.
On India’s vulnerability to the deadly virus, he said, “Efforts are being mounted by the government on war-footing. COVID-19 could impact India directly through trade channels, in which exposure to China is relatively high.”
In a significant relief for the account holders of crisis-hit Yes Bank, Shaktikanta Das announced that the moratorium will be lifted on Wednesday, March 18, 2020.
He assured that swift action has been taken by the government and central bank to resolve Yes Bank crisis and said the depositor’s money in the struggling private sector lender is safe.
He further said that the identity of the bank is going to be retained as a private entity and the bank is under the robust revival plan.
The governor said a new board of Yes Bank will assume its position and the office of the administrator will cease to exist on March 26.
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