GS III: ECONOMY – INDICATORS
RBI moves to ease liquidity further
The Reserve Bank of India (RBI) on 31 August, 2020, announced more measures to ease liquidity pressures amid rising yields on government securities and concerns of higher government borrowing and said that it would conduct additional, special open market operations (OMOs) as part of its efforts to ensure orderly market conditions and congenial financial conditions.
The OMOs via auctions involving the simultaneous purchase and sale of government securities for an aggregate amount of ₹20,000 crore in two tranches of ₹10,000 crore each, would be conducted on September 10 and September 17.
As part of the measures, the RBI also allowed banks to hold fresh acquisitions of statutory liquidity ratio securities acquired from September 1 under Held-To-Maturity up to an overall limit of 22% of net demand and time liabilities up to March 31, 2021, which shall be reviewed thereafter, it said.
RBI said it will conduct term repo operations for an aggregate amount of ₹1 lakh crore at floating rates (i.e., at the prevailing repo rate) in the middle of September to assuage pressures on the market on account of advance tax outflows.
“Thus, the banks may reduce their interest liability by returning funds taken at the repo rate prevailing at that time (5.15%) and availing funds at the current repo rate of 4%.”
RBI said the recent appreciation of the rupee was also working towards containing imported inflationary pressures.
The RBI assured that the borrowing programme of the Centre and States for the year 2020-21 would be completed in a non-disruptive manner.
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RBI moves to ease liquidity further
The Reserve Bank of India (RBI) on 31 August, 2020, announced more measures to ease liquidity pressures amid rising yields on government securities and concerns of higher government borrowing and said that it would conduct additional, special open market operations (OMOs) as part of its efforts to ensure orderly market conditions and congenial financial conditions.
The OMOs via auctions involving the simultaneous purchase and sale of government securities for an aggregate amount of ₹20,000 crore in two tranches of ₹10,000 crore each, would be conducted on September 10 and September 17.
As part of the measures, the RBI also allowed banks to hold fresh acquisitions of statutory liquidity ratio securities acquired from September 1 under Held-To-Maturity up to an overall limit of 22% of net demand and time liabilities up to March 31, 2021, which shall be reviewed thereafter, it said.
RBI said it will conduct term repo operations for an aggregate amount of ₹1 lakh crore at floating rates (i.e., at the prevailing repo rate) in the middle of September to assuage pressures on the market on account of advance tax outflows.
“Thus, the banks may reduce their interest liability by returning funds taken at the repo rate prevailing at that time (5.15%) and availing funds at the current repo rate of 4%.”
RBI said the recent appreciation of the rupee was also working towards containing imported inflationary pressures.
The RBI assured that the borrowing programme of the Centre and States for the year 2020-21 would be completed in a non-disruptive manner.
🍁🍁🍁🍁🍁🍁🍁🍁🍁🍁
Join >> @IAS4India
Join >> @SSC4Exams
Join >> @Banking4Exams
Join >> @CSE_CurrentAffairs
Join >> @TheHindu_Zone_Official
🍁🍁🍁🍁🍁🍁🍁🍁🍁🍁
For paid promotion
Contact @IAS4India_bot