REUTERS/Danish Siddiqui In a surprising move last Friday (May 22), India’s central bank announced yet another steep cut in repo rate. This is the second reduction in the rate at which banks borrow money from the Reserve Bank of India (RBI) since the spread of Covid-19 started hurting the country’s businesses and economy in March. Now, the repo rate stands at an all-time low of 4% (pdf). The intention of these cuts is to make borrowing cheaper for banks so they would dole out more loans to...

REUTERS/Dado Ruvic Indian investors are back in the cryptocurrency game and how. There has been a sharp increase in trading volumes on cryptocurrency exchanges in India since March 5, when India’s supreme court quashed a Reserve Bank of India’s (RBI) circular that barred banks and other financial entities from providing services to virtual currency dealings. Trading volume on Mumbai-based WazirX, one of India’s leading crypto exchanges, rose 400% and 270% month-on-month in March and April,...

REUTERS/Shailesh Andrade The Covid-19 outbreak and the ensuring lockdown has hurt almost all industries in India, but for the country’s $370 billion shadow banking sector, this might be the last nail in the coffin. Since the past two years, several non-banking financial companies (NBFC) in India have been dealing with one bad news after another, including cash crunch, high cost of capital, and burgeoning bad loans. In a recent report, Moody’s said the inability of borrowers to repay loans...

REUTERS/Rupak De Chowdhuri In April 2020, India’s manufacturing and services sectors recorded the sharpest contraction among the world’s top 10 economies. The purchasing managers’ index (PMI) for services, a popular reading released by London-based IHS Markit, stood at 5.4 last month, down from 49.3 in March. A PMI reading below 50 means contraction. The PMI for the manufacturing sector fell from 51.8 in March to 27.4 in April, according to data released this week. The steep drop in services...

REUTERS/Brian Snyder Cash transfers to India’s poor are the right thing to do “not just morally but also economically,” believes Nobel laureate Esther Duflo. “Businesses should be keenly interested in this (cash transfers) and very much behind (it)…because it is the most important thing to do in their self-interest,” the Massachusetts Institute of Technology professor of economics said particularly in the context of India’s coronavirus lockdown. India’s lockdown, in place since March 25, has...