While the rating agency downgraded India’s sovereign rating, BofA Securities’ economists see the present downturn as cyclical rather than structural; say fiscal stimulus is critical for recovery.
Moratorium extended, banks’ group exposure increased to 30%; slew of measures to support economy affected by Covid-19.
The extension, which takes the total day-count of the lockdown to 54, will add to the challenges that the economy was already facing before Covid-19 took the shape of a pandemic.
Analysts with varied views have the 2008 global financial meltdown as the nearest comparable to the Covid-19 pandemic. But they are agreed on one thing: the need for caution.
As a result of the Covid-19 crisis, India can become an attractive investment destination, says Jaspal Bindra, executive chairman, Centrum Group.
Day after the lockdown extension announcement, markets remained in positive territory for majority of the day before global cues pushed them to close in the red.
Minutes of RBI’s Monetary Policy Committee meeting highlight that members were divided on the space for future rate cuts.
The central bank has been quiet on its regular growth and inflation forecasts, citing the highly fluid circumstances, but it has given ample hints in its latest Monetary Policy report.
While directly mum on inflation and growth, the RBI’s latest monetary policy report warns that Covid-19 would impact economic activity in India through lockdowns and slowing global trade and growth.
Housing sector growth will be heavily impacted and is not likely to revive till the economy shows any sign of improvement. Stress in housing loans, particularly in affordable housing loans, will rise.
