New Delhi: The Reserve Bank of India (RBI) is gearing up to create a cash crisis and reduce the impact on the economy due to the outbreak of Coronavirus. The Reserve Bank of India (RBI) has prepared several schemes like putting an extra 1 lakh crore rupees in the system, buying and selling $ 2 billion.
RBI on Monday decided to conduct more Long Term Repo Operation (LTRO). RBI has already started operating LTRO on 17 and 24 February, another 9 March 2020. LTRO is operated for a term of three years. Giving information to the media, RBI Governor Shaktikanta Das said that the new LTRO will be operated, through which one lakh crore rupees will be poured into the system in many parts.
In financial parlance, LTRO is a loan scheme for banks under which the RBI gives loans at the current repo rate. Such an exercise is usually done to provide relief to banks from paying some of their debts. This encourages cash flow in the banking sector.
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