The Reserve Bank of India's (RBI) six-member monetary policy committee (MPC) decided to keep the policy repo rate unchanged at 6.5 per cent for the fourth consecutive meeting, and also maintained its GDP growth and inflation forecasts for 2023-24. These decisions were expected, but the central bank caught bond street off guard on Friday with talks of open market sales of bonds at a time when liquidity is in deficit mode.
Open market operations (OMOs) by selling bonds to withdraw money will further tighten liquidity conditions. The yield on the benchmark 10-year government bond jumped 12 basis points to close the day at 7.34 per cent -- the highest in seven months.
"Going forward, while remaining nimble, we may have to consider OMO sales to manage liquidity, consistent with the stance of the monetary policy. The timing and quantum of such operations will depend on the evolving liquidity conditions," said RBI Governor Shaktikanta Das, while announcing the monetary policy review.
Denne historien er fra October 07, 2023-utgaven av Business Standard.
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Denne historien er fra October 07, 2023-utgaven av Business Standard.
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