Deputy governor of reserve bank of india, Bank

Mumbai, Sep 8 The yield on treasury bills across maturities have risen sharply by more than 150 basis points after the Reserve Bank of India (RBI) started raising repo rate and expectations of more rate hike in the coming policies to tame inflation.The yield on 91-day treasury bills rose by 1.5997 per cent to 5.6287 per cent, on 182-day yield rose by 1.6674 per cent to 6.0999 per cent, and 364-day yield rose by 1.5027 per cent to 6.3378 per cent.Before the first rate hike by the central bank this year on May 4, yield on 91-day T-Bill was at 4.0290 per cent, 182-day was at 4.4325 per cent, and 364-day on 4.8351 per cent."Yields in T-Bill have risen in proportion with hike in the policy rates by 140 bps plus the market is still expecting some more hike which is based on the inflation trajectory. See that smaller hikes may be expected in this month end policy but it's more data dependent," said Ajay Manglunia, Managing Director and Head Fixed Income at JM Financial.In the August monetary policy review meeting, the RBI had raised repo rate by 50 basis points. It was the third straight rate hike by the central bank ever since it has started increasing the rates this year.Central bank began rate hike in May by 40 basis points, which was followed by 50 basis points rate hikes each in June and August."On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.40 per cent with immediate effect," the RBI said in a statement.Meanwhile, narrowing of surplus liquidity from the banking system has also helped rates on these instruments sharply.Liquidity in the banking system, which was in the huge surplus of around Rs 5.72 lakh crore before the first rate hike, dropped sharply to Rs 1.6 lakh crore as on September 7.This was due to dollar sales by the RBI to shore up the rupee, tax outflows, a slack in government spending and slower deposit growth relative to credit growth."Continuous repo rate hikes from RBI and calibrated removal of liquidity from the banking system, the large-scale issuances are also factoring the yields to go up across money market instruments in particular," said said Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincorp LLP, a Mumbai-based debt advisory firm.Srinivasan added, "Recently, we have witnessed large issuances of commercial paper issuances from OMCs and from big Corporate houses. The issuances of Bank CDs are also increasing."As per data compiled showed, commercial papers and certificates of deposit worth over Rs 80,000 crore has been issued by the companies and banks in August.Whereas so far in September, CPs and CDs worth Rs 30,000 crore have been issued.With the continuing growth momentum, the borrowing of funds through money market instruments are increasing day by day. The investors are also getting many options to invest in various short term instruments at attractive levels.Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Deputy Governor Of Reserve Bank Of IndiaFOLLOW

Deputy governor of reserve bank of india, Latest News

The Reserve Bank of India on Thursday cancelled the licence of Maharashtra-based Laxmi Co-operative Bank on the basis of weak financials. The central bank also mentioned that the bank consequently ceases to carry on banking business, with effect from ...

Mumbai, Sep 22 The Reserve Bank of India (RBI) on Thursday cancelled the licence of The Laxmi Co-operative ... ...

Bhubaneswar, Sep 21 The Odisha Vigilance on Wednesday unearthed disproportionate properties, including 21 plots, five buildings, three four-wheelers, ... ...

Mumbai, Sep 19 Paytm, One97 Communications brand has announced that the company has now tokenized over 93 per ... ...

Mumbai, Sep 17 The Reserve Bank of India (RBI) is ready to bring its card-on-file tokenisation norms into ... ...

South Africa Legends will play against defending champions Indian Legends at the inaugural match in Kanpur on 10th Sep. ... ...

Enforcement Directorate (ED) officials who recovered over Rs 17 crore from the residence of a businessman in Kolkata, found 10 trunks on the spot. ...

Mumbai, Sep 8 The yield on treasury bills across maturities have risen sharply by more than 150 basis ... ...