Please Share:: 
MONETARY POLICY
In statu quo! Wait for rate cut is getting longer …
RBI's policy announcement today, met our expectation of no change in policy rates
(repo and reverse repo rates remain unchanged at 8% and 7%). It has albeit reduced
the liquidity provided under ECR facility from 32% to 15% (currently banks
are using less than 10%, hence no impact envisaged on liquidity situation). This
policy has induced banks to reduce their excess SLR holding by reduced ceiling on
SLR securities under HTM category from 24% to 22% by September 2015, gradually.
We believe although this measure may not result in immediate reduction in
excess SLR holdings by the banks, over medium term, banks would need to reduce
their excess SLR holdings, releasing funds for credit to productive sector.
RBI also re-emphasized the risks to inflation glide path of 6% by Jan 16, even
though the risks to 8% by Jan 15 are limited. This limits the prospects of rate reduction
in near future. We are pushing forward our expectation of rate cut from Q3FY16
to Q4FY16. We do not expect any change in policy rates in next monetary policy
too, scheduled on December 2, 2014.
Monetary and Liquidity Measures:
Policy repo rate under LAF unchanged at 8.0%. Consequently, the reverse repo
rate under the LAF remains unchanged at 7.0%, and the marginal standing facility
(MSF) rate and the Bank Rate at 9.0%
CRR unchanged at 4.0% of NDTL
GDP forecast unchanged at 5.5%, FY16 GDP is forecasted to grow by 6.3%.
Statutory liquidity ratio retained at 22% of NDTL
Continuation of liquidity provision under overnight repos at 0.25% of bank-wise
NDTL and liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL
of the banking system. Continue with daily one-day term repos and reverse
repos to smooth liquidity
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
-->
MONETARY POLICY
In statu quo! Wait for rate cut is getting longer …
RBI's policy announcement today, met our expectation of no change in policy rates
(repo and reverse repo rates remain unchanged at 8% and 7%). It has albeit reduced
the liquidity provided under ECR facility from 32% to 15% (currently banks
are using less than 10%, hence no impact envisaged on liquidity situation). This
policy has induced banks to reduce their excess SLR holding by reduced ceiling on
SLR securities under HTM category from 24% to 22% by September 2015, gradually.
We believe although this measure may not result in immediate reduction in
excess SLR holdings by the banks, over medium term, banks would need to reduce
their excess SLR holdings, releasing funds for credit to productive sector.
RBI also re-emphasized the risks to inflation glide path of 6% by Jan 16, even
though the risks to 8% by Jan 15 are limited. This limits the prospects of rate reduction
in near future. We are pushing forward our expectation of rate cut from Q3FY16
to Q4FY16. We do not expect any change in policy rates in next monetary policy
too, scheduled on December 2, 2014.
Monetary and Liquidity Measures:
Policy repo rate under LAF unchanged at 8.0%. Consequently, the reverse repo
rate under the LAF remains unchanged at 7.0%, and the marginal standing facility
(MSF) rate and the Bank Rate at 9.0%
CRR unchanged at 4.0% of NDTL
GDP forecast unchanged at 5.5%, FY16 GDP is forecasted to grow by 6.3%.
Statutory liquidity ratio retained at 22% of NDTL
Continuation of liquidity provision under overnight repos at 0.25% of bank-wise
NDTL and liquidity under 7-day and 14-day term repos of up to 0.75% of NDTL
of the banking system. Continue with daily one-day term repos and reverse
repos to smooth liquidity
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://www.kotaksecurities.com/pdf/dmb/MorningInsight01102014dp.pdf
No comments:
Post a Comment