See 25-50 bps CRR hike in Apr: Macquarie Capital Securities
Published on Mon, Mar 22, 2010 at 11:48 | Source : CNBC-TV18
Updated at Mon, Mar 22, 2010 at 13:08
Like this story, share it with millions of investors on M3
0
Like this story, share it with millions of investors on M3
See 25-50 bps CRR hike in Apr: Macquarie Capital Securities
On Friday, the Reserve Bank of India (RBI) hiked the repo and reverse repo rate by 25 basis points (100 bps=1%). The new repo and reverse repo rate is 5% and 3.5%, respectively. In an exclusive interview with CNBC-TV18, Rajeev Malik, Macquarie Capital Securities, discusses the RBI move and gives his outlook going forward.
Q: The markers for the bond market seem to have clearly set at 8-8.5%, will it be as pat as that you think?
A: It depends on how the borrowing is announced, the magnitude of borrowing and how they go about digesting it. For example, last year the trick was doing in terms of OMOs, I do you think RBI will be pushed to isolate OMOs, they will not necessarily announce it in the calendar. Second is whether or not they do anything, as far as FII participation in G-Sec is concerned, local currency. Those will have a huge impact, but I don't think these are going to be straight away put out in the open. These are more going to be moves for the rainy day kind of a setting.
70-30 split, the one option they could have is much shorter duration and perhaps doing a larger size 20-30% in floaters. Those would be one way of trying to make sure the bond markets digest that huge borrowing overall.
