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The Reserve Bank of India (RBI) on Tuesday discontinued the facility of external commercial borrowings (ECBs) in renminbi, the Chinese currency. Indian companies in the infrastructure sector were allowed to avail this fund raising route subject to a maximum of cap of USD one billion.
The Union Government on Monday announced the auction of four government securities to raise Rs 15,000 crore in the second week of the current month. The auction will be held on on Friday 12, 2013, said a release by the Reserve Bank of India (RBI) on Monday.
The cost of borrowing for Indian companies is likely to come down. Contrary to normal movements, the 10 year-benchmark govt bond yield is currently trading around 20-25 basis points lower than the policy or repo rate at 8%. In the last one month trading volumes have doubled from Rs 20,000-25,000 crore on an average a day to more than 50,000 crore.
Sonal Varma of Nomura and Brinda Jagirdar of SBI Securities explain to CNBC-TV18 that a moderation in inflation and a drop in IIP data might force the RBI to initiate a rate-cut in December
The stock market has rallied over 400 points, cheering the government decision to cut diesel price by sharp Rs 5/litre and Ben Bernanke‘s decision to pump in USD 40 billion via bond purchases to improve the US economy. However, both the events do not warrant any immediate change in the monetary policy stance by the Reserve Bank of India (RBI).
India's wholesale price index (WPI) rose a lower-than-expected 6.87% in July from a year earlier. Experts say, going forward, food prices will keep the pressure up. According to them, the RBI will still remain concerned with the double digit food inflation.
The Reserve Bank of India (RBI) on Tuesday reduced the requirement of statutory liquidity ratio from 24% to 23%. The daily net repo borrowing (banks borrowing from the Reserve Bank of India) is currently around Rs 40,000 crore as against Rs 1 lakh crore 2-3 months back. On an average banks are sitting on excess SLR to the tune of 3 – 4%.
Brinda Jagirdar, head - economic research, SBI explains to CNBC-TVB18 though the RBI announcements seen incremental, they're of great importance in instilling confidence into the economy and the market. Jagirdar adds that growth cannot be restored by initiatives by the RBI alone, but by holistic economic packages by the government
Well, market is clearly divided on this. The Indian rupee on Friday touched a record low at 57.32 against a US dollar before closing at 57.12. This has again broached a debate over rupee sliding to 60, the age bar to become a senior citizen.
The Central Statistical Organization's estimates of FY12 GDP growth have come at 6.9%, below the CNBC-TV18 poll of 7.1% inspite of two consecutive good quarter of harvests.
Brinda Jagirdar, economist of SBI expects a 0.5% CRR cut. "Till March, I don't see any rate cuts," she adds.
