IB Economists

T he United States government announced that they would be providing India with a $2.9 million assistance package in order to help the Indian government prepare laboratory systems, activate case-finding and event-based surveillance, and support technical experts for response and preparedness. This will help India combat the deadly virus which has taken thousands of lives around the world. As India is still in the initial stages and under a lockdown, the total cases in India stand a little above 1200 and have continued to grow, looking at other countries such as Italy and the United States, who have a smaller population and better health facilities compared to India and hence India poses a larger threat from this virus. According to experts the most effective way to stop the spread of this virus is to have social distancing because the virus can spread easily from person to person. However, the World Health Organisation believes that to contain the virus all countries need

On 8th March 2020 there was a price war between Saudi Arabia and Russia, which consequently caused 31% price drop (From $31.02 to $20 per barrel). The factor which led to the price war between the two countries is the drop in quantity demand for oil barrels due to the widespread of Coronavirus, subsequently Russia refused to agree with  OPEC to stabilise/fix a price, clearly indicating a non-collusive oligopoly. The price war has caused the oil prices to drastically fall, and has also led to reduction in the world oil supply, which can have drastic effects on the economy because oil is an essential resource for the world, as oil is used for transportation, energy production, cooking and more, without these activities an economy will have major problems in functioning, for instance visualise an economy sustaining without electricity; communicating with other without electricity would become impossible, which can result in an economy down turn. Nonetheless, the reduction

On Friday, March 27, India’s Central Bank, The Reserve Bank of India reduced the Repo Rate and Reverse Repo Rate in order to tackle the economic slowdown India is facing due to the  coronavirus. India has been under a total lock down and only essential services are open to consumers, this has led to production of a lot of goods and services being put at a standstill since workers cannot travel to their workplace, leading to a shortage of goods and services  forcing many retailers to sell goods at higher prices. The repo rate is the rate at which the commercial banks borrow money from the central bank. The reverse repo rate is the rate at which the central banks borrow money from the commercial  banks, commercial banks may park their excess money there. Both the repo and reverse repo rate are a part of the monetary policy which controls the interest rate and money supply in the  country.  The new repo rate is set at 4.40% and this has been the lowest in the history