Policy Views
POST RBI POLICY REVIEW & IT’S IMPACT ON SHORT & LONG END OF THE YIELD CURVE
RBI Policy Review had sprung a major surprise by cutting CRR by 50 bp to 5.50% . This was done to infuse permanent liquidity to address the structural pressures on liquidity. In the initial phase, this will infuse liquidity to the tune of Rs.32,000 crs; and over longer period to the tune of almost Rs1.50 [...]
WHY GILTs?
I have been recommending investment in GILT schemes primarily on two counts viz. 1) technically, whenever 10 year benchmark yield has breached 8.50%, there has been resistance at this level & the yields have retraced below 8.50% levels & 2) sometime in the near future RBI will have, if not dovish at least a neutral [...]
MY COMMENTS IN AN ARTICLE IN ET – BANGALORE
CURRENT MARKET SCENARIO
I had mentioned in my Blog Note dated November 08’2010 (post RBI announce Policy Review on November 2) that inflation for various reasons will be an issue and hence, liquidity will remain tight for some more time. Having said that, no one expected inflation to remain at such high levels and also the current crisis [...]
POST NOVEMBER 2 RBI POLICY REVIEW
November 2 policy came & went with the same results as markets had expected. There were rate hikes announced of 0.25 bps in both REPO & REVERSE REPO rates with CRR remaining untouched. Positives from the announcements were that RBI categorically mentioned that rates are now likely to be on hold for the immediate future. [...]