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India is outlining an economic stimulus package for the sectors worst affected by the latest COVID-19 wave, Bloomberg reported, citing people familiar with the matter.

The sources said that the Finance Ministry is considering relief plans for various sectors such as tourism, aviation, hospitality industries and small and medium-sized companies, which need additional support measures.

No additional details are available, as the discussion is at an early stage, the sources added.

Among other news, Barclays slashes its full-year 2021-22 economic growth forecast for India by 80 basis points to 9.2%, in response to the current lockdowns induced by the second wave.

“Although India’s second COVID-19 wave has started to recede, the related economic costs have been larger owing to the more stringent lockdowns implemented to contain the outbreak,” Barclays said.

Barclays warned that India’s slow vaccination drive might pose medium-term risks to economic growth, especially if the country experienced the third wave of covid.

Market reaction

Amid the economic stimulus news and the US dollar’s weakness, USD/INR dropped to two-month lows of 72.745 in the last hour.

The spot extends its bearish momentum into the fourth straight day, currently trading at 72.77, down 0.08% on the day.