Reserve Bank of India Unexpectedly Cuts Interest Rates

The video discusses the severe impact of COVID-19 on the global economy, with over 300,000 deaths and stalled economic activity. Central banks, particularly the Monetary Policy Committee (MPC), are called to action. Recent macroeconomic data highlights the pandemic's damage, prompting an off-cycle MPC meeting. The MPC unanimously decides to reduce the policy repo rate by 40 basis points to 4% and maintain an accommodative monetary stance to support growth and control inflation. The MSF and Bank rates are adjusted accordingly.

What was the primary reason for the global economic slowdown mentioned in the video?

• COVID-19 pandemic

• Technological advancements

• Natural disasters

• Political instability

Why did the Monetary Policy Committee decide to hold an off-cycle meeting?

• To discuss technological innovations

• To plan for future elections

• To address the economic impact of COVID-19

• To review environmental policies

What was the unanimous decision made by the MPC regarding the policy repo rate?

• To eliminate it entirely

• To reduce it by 40 basis points

• To maintain it at the current level

• To increase it by 40 basis points

What is the new reverse repo rate after the MPC's decision?

• 4.4%

• 3.35%

• 4%

• 4.25%

What stance did the MPC decide to maintain to support economic growth?

• Restrictive

• Accommodative

• Aggressive

• Neutral