Rbi Liquidity Conditions

The Reserve Bank of India will stop conducting 28-day variable rate reverse repo (VRRR) auctions, considering the current banking system liquidity conditions, but will continue with 14-day VRRR auctions, the central bank chief said on Friday.

The Reserve Bank of India on Tuesday announced sale and purchase of G-Secs or government securities worth Rs 20,000 crore. In a statement, the RBI said it decided to conduct open market operation (OMO) in two tranches of Rs 10,000 crore each, after reviewing the "current and evolving liquidity and market conditions". The move comes days after minut...

The decision was taken on "a review of the current liquidity and market situation and an assessment of the evolving financial conditions", RBI said.

Faced with liquidity crunch after IL&FS default and with rising number of defaults, the shadow bankers are seeking a bailout in the form of a separate liquidity window.

The move comes amid worries of a liquidity crunch after defaults at one of the country's largest infrastructure financing companies.

RBI said the auctions would be conducted during the second, third and fourth week of October.

"Based on the current assessment of prevailing and evolving liquidity conditions, the RBI has decided to conduct sale of government securities under Open Market Operations," the central bank said.

Sovereign bonds posted sharp gains on Tuesday after the Reserve Bank of India said it will buy bonds through open market operations (OMO) in two days' time, to ensure adequate cash conditions in the banking system.

The Reserve Bank of India on Thursday said it will actively inject additional cash into the banking system in March, when liquidity conditions tend to tighten because it marks the end of the fiscal year.

Reserve Bank of India (RBI) Governor Raghuram Rajan and India's bankers are staking out sharply opposing positions ahead of talks on revamping the central bank's management of cash conditions to ease severe liquidity shortages.

Cash conditions in the Indian banking system are balanced and the RBI will inject long-term funds if needed, said Governor Raghuram Rajan on Tuesday.

Improvement in liquidity condition is unlikely to help ease short-term rupee overnight index swap (OIS) rates below 7.75 per cent, as the Reserve Bank of India (RBI) may not slash policy rates at its upcoming meeting, according to a report by financial services firm DBS.

The two cuts in MSFs are aimed at restoring the primacy of long term rates over short term rates in markets. The cut in MSF also indicates that the RBI is becoming more comfortable about the currency and a bit more concerned about domestic liquidity conditions, Leif Eskesen of HSBS Global said in a statement.

If there is excess liquidity, RBI resorts to the sale of securities to suck out liquidity. When liquidity conditions are tight, the RBI buys securities, thereby releasing liquidity into the market.

India needs to withdraw liquidity measures, introduced in July to stabilise the rupee, as soon as market conditions allow, Rajan told a press conference after conducting his first policy review since becoming governor.

The Reserve Bank of India will stop conducting 28-day variable rate reverse repo (VRRR) auctions, considering the current banking system liquidity conditions, but will continue with 14-day VRRR auctions, the central bank chief said on Friday.

The Reserve Bank of India on Tuesday announced sale and purchase of G-Secs or government securities worth Rs 20,000 crore. In a statement, the RBI said it decided to conduct open market operation (OMO) in two tranches of Rs 10,000 crore each, after reviewing the "current and evolving liquidity and market conditions". The move comes days after minut...

The decision was taken on "a review of the current liquidity and market situation and an assessment of the evolving financial conditions", RBI said.

Faced with liquidity crunch after IL&FS default and with rising number of defaults, the shadow bankers are seeking a bailout in the form of a separate liquidity window.

The move comes amid worries of a liquidity crunch after defaults at one of the country's largest infrastructure financing companies.

RBI said the auctions would be conducted during the second, third and fourth week of October.

"Based on the current assessment of prevailing and evolving liquidity conditions, the RBI has decided to conduct sale of government securities under Open Market Operations," the central bank said.

Sovereign bonds posted sharp gains on Tuesday after the Reserve Bank of India said it will buy bonds through open market operations (OMO) in two days' time, to ensure adequate cash conditions in the banking system.

The Reserve Bank of India on Thursday said it will actively inject additional cash into the banking system in March, when liquidity conditions tend to tighten because it marks the end of the fiscal year.

Reserve Bank of India (RBI) Governor Raghuram Rajan and India's bankers are staking out sharply opposing positions ahead of talks on revamping the central bank's management of cash conditions to ease severe liquidity shortages.

Cash conditions in the Indian banking system are balanced and the RBI will inject long-term funds if needed, said Governor Raghuram Rajan on Tuesday.

Improvement in liquidity condition is unlikely to help ease short-term rupee overnight index swap (OIS) rates below 7.75 per cent, as the Reserve Bank of India (RBI) may not slash policy rates at its upcoming meeting, according to a report by financial services firm DBS.

The two cuts in MSFs are aimed at restoring the primacy of long term rates over short term rates in markets. The cut in MSF also indicates that the RBI is becoming more comfortable about the currency and a bit more concerned about domestic liquidity conditions, Leif Eskesen of HSBS Global said in a statement.

If there is excess liquidity, RBI resorts to the sale of securities to suck out liquidity. When liquidity conditions are tight, the RBI buys securities, thereby releasing liquidity into the market.

India needs to withdraw liquidity measures, introduced in July to stabilise the rupee, as soon as market conditions allow, Rajan told a press conference after conducting his first policy review since becoming governor.