No. of views : (2083)
Views on RBI policy by Mr.R.K. Gurumurthy
Posted on: 06/Dec/2018 10:36:50 AM
RBI’s 5th Bi-Monthly Policy for FY 2019 was on expected lines in so far as the Key Rates were concerned. No change in key policy rates
The surprise element was that SLR has been cut in a calibrated manner prospectively beginning January 2019, by 150 points, to align with LCR. The move may release and add to lendable liquidity locked in Government Securities. With inflation expectations lowered, this should not impact bond sentiment in the short run. Bonds have rallied on the back of announcement that Open Market Operations will continue, and future policy and rate stance will depend on incoming data – implying a longer pause is the way forward. Inflation expectations have been sharply lowered for H2 FY 2019, which is the key driver on the day for bonds outperforming both currencies and equities. The focus in this policy has been on addressing the issues around structural and systemic liquidity. Growth forecast has been retained, possibly due to the belief that output gap has closed and GDP growth should remain robust. The policy has allowed NRIs to hedge their interest rate risks using onshore hedging products – this will deepen and enhance liquidity for popular products like the OIS (overnight index swaps).Overall, the policy could be a watershed event if a shift from tightening to neutral/easing stance were to take shape in the future”
Post your requirement - We will connect with the right vendor or service provider
