Moneycontrol
Jan 25, 2012 06:19 PM IST | Source: CNBC-TV18

Liquidity comfortable situation till Feb: DSP BlackRock

Dhawal Dalal of DSP Blackrock Mutual Fund says the market is expecting further cash reserve ratio (CRR) cuts in March-April after the 'surprise' 50 bps cut in January by Reserve Bank.

Liquidity comfortable situation till Feb: DSP BlackRock

Dhawal Dalal of DSP Blackrock Mutual Fund says the market is expecting further cash reserve ratio (CRR) cuts in March-April after the "surprise" 50 bps cut in January by Reserve Bank.


He feels the market is drawing comfort from the RBI move to improve liquidity. The rate cut underscores a policy shift from fighting inflation to reviving growth. "I think the liquidity situation is comfortable until say about February," he adds.


According to Dalal the concerns around further open market operations led to higher yields. "The technical pullback was overdue in the bond markets," he says.


Below is an edited transcript of Dalal's exclusive interview on CNBC-TV18. Also watch the attached videos.


Q: What has led to this comeback from 8.08-8.38%? What would you put it down to?

A: I think there were two parts to the whole movement. Before the run-up to the credit policy, the bond yields dropped very sharply. From the peak of around 8.30-8.35%, it came down in a very sustained manner. So from a technical perspective, there was a pullback which was coming and the RBI governor

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