RBI MPC policy live updates: The fact is that the RBI Governor Shaktikanta Das and his colleagues at MPC do not have any room for any major change in the rate approach this time compared with the last policy review in October. That’s because the broader inflation pattern the most watched factor by the MPC hasn’t changed much since then.
MUMBAI: Banks are staring at mark to market losses on their bond holdings beyond the stipulated 21 percent of their deposits. To calm the nerves of banks which have been funding government s record borrowings, the RBI may have to intervene more aggressively or make provisions for exemption the losses to enable continued support to government borrowing.
The average increase in G-sec yields across three,five and & 10 years maturity is around 31 basis points since the budget, according to a report by SBI s economics research team. This is important as any further upward movement in G-sec yields even by 10 bps from the current levels could usher in MTM losses for banks said S K Ghosh, group chief economic advisor at SBI. That could be a minor blip of a rather wise exceptional year in FY21 for bond markets with the RBI assiduously supporting debt management of Government at lowest possible cost in 16 years