3QFY10 Monetary Policy review: Angel Broking

Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

Angel Broking has come out with a review report on Q3FY10 Monetary Policy. The report said domestic liquidity would remain comfortable.

The report says, "RBI increased the cash reserve ratio (CRR) of scheduled banks by 75bp from 5.0% to 5.75% of their net demand and time liabilities (NDTL) in two stages; the first stage of increase of 50bp will be effective the fortnight beginning February 13, 2010, followed by the next stage of increase of 25bp effective the fortnight beginning February 27, 2010. As a result of the increase in the CRR, about Rs 36,000 crore of excess liquidity is expected to be absorbed from the system."

"Banks remain flush with liquidity, having deployed an excess of almost Rs 4 lakh crore in risk-free investments like government bonds and reverse repo auctions, as strong domestic savings continue to drive 20% growth in deposits even though credit growth is at 12-13% yoy."

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment