By: ManjuChandran
Countries in south Asia, home to a fifth of the world’s population, have been dragged into an economic crisis by the fallout from the coronavirus pandemic.
India’s central bank slashed interest rates last Friday (27) in an emergency move to counter the economic fallout from the coronavirus pandemic after the government locked down the country to slow down infections.
Prime minister Narendra Modi has asked India’s 1.3 billion people to stay indoors for three weeks in the world’s biggest lockdown, shutting down Asia’s third-largest economy and leaving millions of economically vulnerable people without work.
The Reserve Bank of India lowered the benchmark repo rate by 75 basis points to 4.40 per cent after a video conference with its monetary policy committee, which was brought forward to respond to the crisis.
“A war effort has to be mounted and is being mounted to combat the virus, involving both conventional and unconventional measures in a continuously battle-ready mode,” RBI governor Shaktikanta Das said.
Das said India would struggle to achieve fourth-quarter growth projections of 4.7 per cent as major global economies faced the risk of recession.
Pakistan, where the number of coronavirus cases neared 1,300, has asked the International Monetary Fund for a fresh $1.4 billion loan.
Last Tuesday (24), it cut its benchmark interest rate for the second time in a week, to 11 per cent, and announced measures to support the economy and poorer workers.
Bangladesh, the world’s second-largest manufacturer of garments, has also said it might need help from the IMF and the World Bank. The country’s garment makers’ and exporters’ association said foreign buyers had either cancelled or suspended orders worth more than $2bn. “Unfortunately, Bangladesh could lose 1.1 per cent of GDP growth due to the coronavirus crisis,” finance minister Mustafa Kamal said.
“It is our request to the World Bank and the IMF to come up with greater support considering the ongoing crisis.”
Sri Lanka has asked for a moratorium on its international debt repayments.
