With a move to managing the excess liquidity in the system banking regulator Reserve Bank of India announced today that it woujld absorb a part of this extra cash by applying an incremental cash reserve ratio (CRR) as a purely temporary measure.
RBI's open market operations wouldn't be flooding the system with excess money. The policy is a big structural change, says Hitendra Dave, Head Of Global Banking & Markets, HSBC India.
The bond markets got a big boost yesterday as the Reserve Bank of India (RBI) announced that it will buy bonds worth Rs 10,000 crore on November 24. Suyash Choudhary, head of fixed income at IDFC Mutual Fund expects the total amount of infusion to be between Rs 60,000-70,000 crore.