30 Jul 2013
Flash: RBI address FX volatility – TD Securities
FXstreet.com (London) - Cristian Maggio, Senior Emerging Markets Strategist, Rates and FX Research at TD Securities noted that the RBI announced their decision to hold all key rates unchanged.
Key Quotes:
“The RBI announced their decision to hold all key rates unchanged following on the recent effort to tighten liquidity conditions to address FX volatility”.
“This means that the benchmark repo rate is held at 7.25%, while the overall access to repo liquidity under the LAF facility remains restricted to circa INR375 billion, or 0.5% of Net Demand and Time Liabilities (NDTL) of the banking system”.
“This provision applies to each bank individually, which means no bank can exceed the 0.5% limit on their own NDTL”.
“The reverse repo rate and the CRR are also held unchanged at 6.25% and 4.00%, respectively, while both the Marginal Standing Facility (MSF) rate and the Bank Rate continue to stand 200bp above the repo at 10.25%”.
Key Quotes:
“The RBI announced their decision to hold all key rates unchanged following on the recent effort to tighten liquidity conditions to address FX volatility”.
“This means that the benchmark repo rate is held at 7.25%, while the overall access to repo liquidity under the LAF facility remains restricted to circa INR375 billion, or 0.5% of Net Demand and Time Liabilities (NDTL) of the banking system”.
“This provision applies to each bank individually, which means no bank can exceed the 0.5% limit on their own NDTL”.
“The reverse repo rate and the CRR are also held unchanged at 6.25% and 4.00%, respectively, while both the Marginal Standing Facility (MSF) rate and the Bank Rate continue to stand 200bp above the repo at 10.25%”.