Such bond buy and sell operations soften long-term yields that help govt borrow cheap; they also give apex bank enough long-term bonds to support its liquidity operations
If we keep subsidising or protecting businesses that are not able to compete, we have an issue. I would expect the market to be able to sort things out, says Uday Kotak
Credit guarantees from government, deficit financing by the RBI and an HTM hike for banks are the only solutions that can get the wheel of credit and investment rolling
Concerted efforts are required from the central bank and the government
By resorting to the two-step OMOs, the RBI is managing the yield at both the shorter as well as the longer end
No firm decision has been reached on this, said sources. The SDF, when introduced, will become the lower bound of the corridor for the liquidity management window.
Wary of supply, bond dealers asked for sharp increase in rates from state governments during Wednesday's auction.
According to the schedule, 19 states had lined up to borrow up to Rs 37,500 crore, but they managed to raise Rs 32,560 crore.
The central bank has announced a series of measures to tide over any liquidity issues caused by the Coronavirus dislocation in the markets
The central bank received bids worth Rs 45,049 crore for Friday's open market operation
The central bank infused Rs 10,000 crore through open market operations on Friday
The central bank will conduct open market operations (OMO) on March through a multi-security auction
The government securities will be purchased through a multi-security auction using the multiple price method
If the volatility in the financial market continues for a prolonged period, it could also result in important implications for asset prices
The cut-off yield for 7.32 per cent-2024 was 6.408 per cent, while for 6.45 per cent-2029, it was 6.5780 per cent
There is fear that the RBI has no wiggle room for further rate cuts. Without rate support, yields will rise. This translates into a fall in prices for bonds
Long-term bond yields have come down by 20 bps since first OMO last month
Offers to purchase three securities, including 10-year benchmark govt bond
RBI said it reserves the right to decide on the quantum of purchase/sale of individual securities; accept bids/offers for less than the aggregate amount
The 10-year bond yields closed the year at 6.555 per cent, from its January 1 level of 7.418 per cent. Bond prices rise, yields fall.