Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Interesting Articles

| More

RBI monetary policy announcement - Mr. Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd

Posted On: 2020-05-22 15:33:38


"The RBI has cut the key policy rates by 40bps in the bi monthly meeting of the MPC. Post the Covid 19 outbreak the Repo rate has been reduced by 115 bps to 4.4% while the Reverse repo rate has been reduced by a total of 155bps to 3.35%. In it's assessment of the economy the RBI expects a negative growth rate for the economy in FY2021 with risks on the downsides and therefore has decided to continue with it's accommodative stance for as long as required which indicates more rate cuts down the line subject to inflation cooling off. In order to ease financial stress the RBI has allowed extension of moratorium on term loans by an additional three months till 31st of August 2020. Similarly the RBI has also provided relief to businesses the RBI has allowed deferment of interest on working facilities for another three months till the 31st of Aug'20 which will be converted into a term loan to be repayable by the end of FY2021.

The RBI has also taken a series of measures to address the issues for the EXIM sector and has announced various measures in order to ease the stress on the sector including increase the maximum permissible period of pre-shipment and post-shipment export credit along with extending liquidity facility to the EXIM bank of India of INR 15,000 cr. The RBI has also tried to address the issues of MSME's by extending the INR 15,000 cr. refinancing facility provided to SIDBI by 90 days.

While the rate cuts and other liquidity measures along with forbearance should provide some relief to the economy the new 10 year G-Sec paper is currently trading at ~5.7% which signifies a spread of ~170bps over the repo rate which is very high as compared to normalized spread of ~75bps. The unusually high spread between the overnight rate and the 10 year G-Sec rate is not allowing full transmission of the rate cuts so far as markets are concerned over Government borrowings in FY2021 given the likelihood of a very large fiscal deficit. Given the surplus liquidity in the system of over ~7 lakh cr. which is parked with the RBI through the reverse repo window we believe that the need of the hour is for the RBI to undertake more unconventional policy measures like operation twist which can help push down the long term G-Sec rates and help bring down borrowing costs for consumers and businesses."


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

Decoding: Pledging of shares and upfront margins in the cash market!

SIDBI joins hands with Govt. of Rajasthan for the development of MSME ecosystem in the State

Are promoters using rights issue to increase their stake in the company?

All you want to know about Rights Entitlement

45% of the customers have taken moratorium PAN India; more observed in the northern region of the country: Finway

DISCOM dues balloon to ₹1.199 trillion

TNPL recommends dividend of Rs. 6 - Dividend Yield @ 5.45%

HUDCO - Rs. 2.35 dividend recommended - Dividend Yield @ 7.01%

PTC India Ltd - Rs. 5.50 dividend recommended - Dividend Yield @ 11.46%

PNB Gilts Ltd - Rs. 3 dividend recommended - Dividend Yield @ 8.57%

How to apply for Rights Issue of Arvind Fashions Limited?

How to apply for Rights Issue of Aditya Birla Fashion and Retail Limited?

An insight on Aarti Surfactants Limited

Covid-19 and its impact on businesses

Nifty Gained 8% in the June Series, Bank Nifty Surged 12%-Highest Since March 19 - HDFC Securities

IMF Growth Revision for India - Acuité Ratings & Research

Co-operative Banks - RBI Supervision - Acuité Ratings & Research

HDFC Securities views on relaxations announced by SEBI

India can reduce China trade deficit by over $8 billion in FY21-22 - Acuité Ratings & Research

How can investors preserve their wealth during times of crisis

JM Financial Yield Enhancer (Distressed Opportunity) Fund I raises Rs.160 crore in its first close

Samco Securities launches BTPT - Buy Today, Pay In Two days for Investors Buying Stocks

No data breach of BHIM app: Report

India's sovereign rating downgrade by Moody's - Acuité Ratings & Research

Banking Sector Credit Trends - Unusual trends - HDFC Securities

Rollover Report for May - June 2020: Angel Broking

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on Q4 GDP

Mr. Dhiraj Relli views on GDP Numbers - HDFC Securities

Banking Sector Update - NIM compression on the cards - HDFC Securities

May series ends with a bang: Angel Broking

May 2020 F&O Series Expiry - Mr. Nandish Shah, Technical Research Analyst, HDFC Securities

Views on Impact of Locusts Attack on Agriculture - Acuité Ratings & Research

ICAI establishes Center for Audit Quality

Bharti Telecom raised over Rs. 8433 crores through Accelerated Book-build offering of equity shares of Bharti Airtel

SATYA MicroCapital raises INR 105 crore equity funding from Japan-based Gojo & Company Inc.

Mr. Rajnish Kumar, Chairman, SBI & IBA on the announcements made by RBI today

Views of Mr. Umesh Revankar, MD and CEO, Shriram Transport Finance on RBI announcement

Views of Mr. George Alexander Muthoot, MD, Muthoot Finance on RBI announcement today

Views of Ms. Anagha Deodhar - Economist, ICICI Securities on the RBI announcement today

Views on RBI Policy announcement today - Federal Bank

RBI Monetary Policy (May 2020) by Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

Religare Finvest Ltd. on today's monetary policy by RBI

RBI's proactive measure will help revive economy: Dr.Niranjan Hiranandani

Mr. Dhiraj Relli views on today's announcement made by RBI

Views of Mr. R K Gurumurthy, Head - Treasury, Lakshmi Vilas Bank on the RBI announcement today

Suvodeep Rakshit, Vice President & Sr. Economist, Kotak Institutional Equities on RBI announcement

Suman Chowdhury, Chief Analytical Officer at Acuité Ratings & Research, on today's RBI announcement

General Insurance Sector Update - GDPI continues to decline due to Lockdown - HDFC Securities

Stress in Banking Sector to Continue: Geojit Financial Services

Banking Sector Update - What have banks said - HDFC Securities







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019