The meeting, though without a formal agenda, is expected to focus on current market conditions, say sources
The Reserve Bank of India will meet select primary dealers and banks on Tuesday, three traders aware of the developments told Reuters, amid concerns that tightening liquidity in the banking system is pressuring the government bond market.
The meeting, though without a formal agenda, is expected to focus on current market conditions, the traders said, declining to be named as they are not authorised to speak to the media.
The RBI on Friday cancelled an auction of ₹11,000 crore in seven-year government securities, triggering a seven-basis-point drop in the benchmark bond yield.
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Oct 15th:
India RBI’s liquidity boost falters amid FX market intervention, analysts say
MUMBAI, Oct 15 (Reuters) – The Reserve Bank of India’s liquidity infusion via a phased cash reserve ratio cut had less impact than expected as dollar sales and maturing FX forwards drained funds, poising short-term rates for a rise, four analysts said.
In June, the central bank announced a phased 100-basis-points CRR cut from September to November to release about 2.5 trillion rupees ($28.3 billion), but analysts said the liquidity boost has proved far smaller than the expected 1.25 trillion rupees.
