The six-member monetary policy committee (MPC), headed by RBI governor Urjit Patel, Thursday maintained status quo on repo rate but revised the reverse repo rate upward by 25 basis points to 6 percent.
Major factor contributing to the stable monetary policy rate could be impending concerns about inflation and, perhaps in the backdrop increase in the US Fed rates.
There is a high likelihood of a 25 bps cut in the repo rate.
The central bank will also conduct an auction of 35 days Cash Management Bills under the MSS for Rs 60,000 crore tomorrow.
After the withdrawal of the legal tender character of the Rs 500/1,000 denomination notes with effect from November 9, there has been a surge in deposits with the banks, the Reserve Bank said in a notification.
The Reserve Bank has raised the cash deposit or reserve ratio limit for banks to contain liquidity surge post demonetisation. However, it has also assured it will revisit the limits once the government issues an adequate quantum of Market Stabilisation Scheme bonds. Here are 5 things you should know about MSS bonds and how they will help.
Finance Ministry today said RBI's raising CRR became necessary due to increase in liquidity in the system as large sums of money in the form of scrapped Rs 500/1000 notes is being deposited by the public in banks.
Speaking to CNBC-TV18 Ananth Narayan of Standard Chartered Bank said that the market will continue to remain in excess liquidity. Lack of credit offtake, economic slowdown in the quarter coupled with surplus deposits in banks will mean a soft corner for bonds, he said.
Emkay Global Financial Services research has come out with its report on Indian auto sector. Accumulate Mahindra and Mahindra (MM) & Tata Motors (TTMT) as they are likely to disappoint lesser than recovery plays like Ashok Leyland (AL), Maruti Suzuki India (MSIL) in the near term, says the research firm.
SPA Research has recommended hold rating on Motherson Sumi Systems (MSS) with a target price of Rs 197, in its February 14, 2013 research report.