Covid-19 pandemic: Central Banks’ Policy Rates andtheir Implications

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Dr. Poonam Singh , Ishrat Rasool , Dr. Jitin Gambhir


It is observed since the inception of spread of COVID 19 Pandemic across the globe that central banks have become very active in managing the monetary mechanism of the financial system all across the countries. This is obvious as the present crisis has severely affected the all segments of the economy and virtually the economies for a particular period brought to a halt deliberately to control and minimise the wider impact. With the lockdown across the segments, the economies practically paralysed if perceived from the financial angle. The Central banks alertness and prompt actions by way of immediate policy measures were very much called for. All the Central banks have taken required policy measures in providing liquidity to the financial markets and businesses through easing various policy rates. This paper assesses the monetary policy measures initiated by the Reserve Bank of India, the Central Bank of the country since the beginning of COVID cases in different phases. The paper analyses the correlation among COVID cases and policy rates and co-integration among different variables and their short term and long term implications. The study primarily finds some of the variables have long term impact while few of them not much significant effect.

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