Tag: RBI

RBI sets rupee reference rate at 67.1958 against US dollar

06/02/2017 14:34

The Reserve Bank of India has fixed the reference rate of the rupee at 67.1958 against the US dollar and 72.4035 for the euro.

The corresponding rates were 67.3825 and 72.4429 on Friday.

According to a RBI statement, the exchange rates for the pound and the yen against the rupee were 83.9208 and 59.73 per 100 yen, respectively, based on reference rates for the dollar and cross-currency quotes at noon.

The SDR-rupee figure will be based on this rate, the statement added.

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RBI lowers required ratings, minimum ticket size of CPs

RBI lowers required ratings, minimum ticket size of CPs

03/02/2017 11:40

In its bid to widen the bond market, the Reserve Bank has relaxed commercial paper (CP) issuances by lowering the minimum required credit rating to A3 from A2 as well as the ticket size from Rs 10 lakh to Rs 6 lakh. “CP shall be issued in minimum denomination of Rs 5 lakh and multiples of Rs 1 lakh…the minimum credit rating for a CP shall be ‘A3’ as per rating symbol and definition prescribed by Sebi,” the Reserve Bank said in a new notification under the Commercial Paper Directions 2017, issued by its financial markets regulation department.

Earlier minimum required rating was A2, while the minimum ticket size was Rs 10 lakh. It can also be noted that many small companies have been facing difficulties in raising funds from the money market as they do not enjoy good credit ratings and this move will help such companies raise debt capital.

The notification said eligible issuers shall obtain credit rating for issuance of CP from at least two Sebi-registered rating agencies, and should adopt the lower of the two ratings.

It also said CP may be issued at a discount to face value but CPs are an unsecured money market instrument issued in the form of a promissory note. The original tenor of a CP lies between seven days to one year. CPs are held in a dematerialised form through any of the depositories approved by and registered with Sebi.

RBI also made it mandatory to report secondary market trading and settlement within 15 minutes of the trade to the Financial Market Trade Reporting and Confirmation Platform (F-Trac) of Clearcorp Dealing System India.

It also said CPs can be bought back in full or part, at prevailing market price and the buyback offer should be extended to all investors in the CP issue and should not be made before 60 days from the date of issue. Once bought back CPs shall stand extinguished.

The apex bank further said the issuer has to ensure that the proceeds should be used to finance only current assets and operating expenses. The end use must be explicitly disclosed in the offer document. The issuer should also furnish the board resolution authorising the company to borrow through CP to IPAs (issuing and paying agents).

The issuer also has to submit a certificate from CEO/CFO to IPAs on quarterly basis that the CP proceeds are used for the disclosed purposes only.

RBI may consider a rate cut in first half of this year: DBS

17/01/2017 17:08

The Reserve Bank of India is expected to go for a rate cut in the first half of this year, largely owing to ‘below estimate’ inflation, says a DBS report.

Rising prices of petrol and diesel fuelled WPI inflation to 3.39 per cent in December 2016.

According to the global financial services major, the WPI readings are likely to head towards 4 per cent in the first quarter of this year from 3.4 per cent in October-December quarter of 2016.

These readings are far from “threatening” levels and still hovering below the 5.4 per cent averaged in the past decade.

“On policy, the RBI is likely to monitor CPI inflation more closely. Below-estimate inflation and soft incoming data is expected to prod the central bank to consider a rate cut in first half of this year,” DBS said in a research note.

Though timings of the rate cut, between the February and April policy meetings is a ‘close call’, following which rates are likely to ‘plateau’ it said.

Beyond a rate cut in the first half of this year, the scope for further rate cuts are unlikely largely owing to risks from oil prices, GST implementation, growth pick-up, public-sector allowance hikes and higher US interest rates, it added.

On December 7, the central bank kept interest rate unchanged despite calls for lowering it and also lowered the economic growth projection by half a percentage point to 7.1 per cent in the first policy review post demonetisation.

The central bank will hold its next monetary policy meet on February 8.

RBI likely to go for 25 bps rate cut in 2017: Citigroup

10/01/2017 14:15

The Reserve Bank of India is expected to go for only a 25 bps rate cut this year and the likelihood of an easing in April is more than in February, says a Citigroup report.

According to the global financial services major, the monetary easing support to rates is waning as the mantle is passed on to the fiscal policy.

“On balance, and given our baseline assumption of a deviation in fiscal deficit roadmap (from 3 per cent of GDP to 3.4 per cent of GDP in 2017-18), we expect MPC to cut policy rate by only 25 bps in 2017,” the report said.

It added that the rate cut would be more effective after the re-monetisation exercise is concluded fully and there is absolute clarity on the increase in lendable resources for banks.

“This makes the April rate cut, a tad more likely than the February rate cut,” it said.

On December 7, the central bank kept interest rate unchanged despite calls for lowering it and also lowered the economic growth projection by half a percentage point to 7.1 per cent in the first policy review post demonetisation.

The central bank will hold its next monetary policy meet on February 8.

Though the CPI inflation has stayed within RBI’s target range for over 2 years and the average CPI inflation has declined every year since 2012-13, reflationary risks are setting in as commodity prices rise and dollar strength continues, the report said.

Citigroup expects 2017-18 average inflation at 4.9 per cent up from 4.6 per cent in 2016-17.

Along with global factor like crude prices (crude price is likely to go up to USD 65/bbl by December 2017), domestic factors are also turning adverse like MSP and rural wages, the report added.

RBI sets rupee reference rate at 67.9522 against dollar

06/01/2017 15:22

The Reserve Bank of India today fixed the reference rate of the rupee at 67.9522 against the US dollar and 71.8662 for the euro.

The corresponding rates were 67.7884 and 71.5574, yesterday.

According to an RBI statement, the exchange rates for the pound and the yen against the rupee were 84.0976 and 58.50 per 100 yens, respectively, based on reference rates for the dollar and cross-currency quotes at noon.

The SDR-rupee figure will be based on this rate, the statement added.

RBI takes a U-turn, allows KYC accounts to deposit more than Rs 5000

21/12/2016 15:43

In a dramatic turn of events, the Reserve Bank of India on Wednesday withdrawn restrictions imposed on bank deposits exceeding Rs 5000 in old notes of Rs 500 and Rs 1,000.

In a fresh notification, the central bank has said that deposits more than Rs 5,000 in of old notes will be allowed until December 30, but only to KYC-compliant accounts. This means all fully KYC-complaint account holders can deposit money in old currency without any verification.

On Monday, the Reserve Bank of India had issued a notification that tenders of Specified Bank Notes (SBNs) in excess of Rs 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. That too, only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation.

The above restrictions shall not apply to tenders of SBNs for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016, RBI had notified on December 19, 2016.

NSE seeks applicants for post of MD & CEO

19/12/2016 17:07

Beginning the recruitment process, top stock exchange NSE has invited applications to fill the vacuum created by surprise exit of Chitra Ramkrishna as Managing Director and Chief Executive.

“The board of directors of the National Stock Exchange of India Ltd (NSE) desires to recruit a Managing Director and Chief Executive Officer for the organisation,” the exchange said in a public notice.

“As part of the recruitment process, the board seeks applications from qualified professionals for the post,” it further said.

Interested candidates, who are required to be seasoned professionals with minimum 20 years of experience, have to submit their applications latest by January 11, 2017.

The applications would be shortlisted by a four-member selection committee which has been recently formed by the stock exchange.

“The selection committee, after following the due selection process, will recommend name(s) to the nomination and remuneration committee and board of the NSE for appropriate decision,” the exchange said.

“The decision of the board on the selection will be final,” it said.

The four-member search committee comprises of Mahindra & Mahindra Chairman Anand Mahindra, former RBI Deputy Governor Usha Thorat and NSE independent directors T V Mohandas Pai and Dinesh Kanabar.

Among other qualifications, the interested applicant is required to have “excellent knowledge of the financial markets” and good understanding of technology and operations.

“Experience/exposure to financial exchanges and global markets would be an advantage but is not essential,” the notice said.

RBI to sell overnight variable rate repo for Rs 1000 bn today

RBI to sell overnight variable rate repo for Rs 1000 bn today

08/12/2016 16:12

The Reserve Bank of India on Thursday said it will conduct an overnight variable rate repo auction for a notified amount of ? 1000 billion today.

“The auction will be conducted between 2.00 pm and 2.30 pm as per the revised guidelines on Term Repo Auctions issued on February 13, 2014,” RBI said in a press release.

Successful bidders will get the allotment at their respective bid rates, while bids at or below the repo rate will be rejected.

The reversal of the Overnight Variable Rate Repo will take place on December 9, 2016, it added.

Mid Session: Markets remain rangebound; APSEZ, HDFC top gainers

07/12/2016 12:22

The key domestic benchmark indices were trading in a positive terrain in the late morning trading session in rangebound trade as participants raised bets for rate cut ahead of the RBI policy meet scheduled for later in the day amid positive cues from fellow Asian peers.

The market is expecting rate action by RBI due to low inflation data and expectations of a further strengthen in deflationary forces.

The market is anticipating 25 bps cut in interest rate, while some expecting a 50 bps reduction, to combat the on-going demonetisation shock with November inflation staying in a comfortable territory of around 4 per cent. Rate-sensitive stocks such as financial, auto and realty will remain in focus today. Also, buying momentum was witnessed mainly in the oil & gas and public sector undertaking sector stocks.

At 12:22 AM, the Bombay Stock Exchange bellwether Sensex was at 26434.81 up by 42.05 points or by 0.16 per cent, while the NSE Nifty was at 8162.45 points, trading higher by 19.3 points or by 0.24 per cent.

The BSE Sensex touched an intraday high of 26469.93 and an intraday low of 26408.77 while the NSE Nifty touched an intraday high of 8170.7 and an intraday low of 8149.9

The top gainers of the BSE Sensex pack were Adani Ports & Special Economic Zone Ltd. (Rs. 277.70,+2.08 per cent), Housing Development Finance Corporation Ltd. (Rs. 1265.00,+1.70 per cent), Tata Motors Ltd. (Rs. 446.40,+1.14 per cent), Hero MotoCorp Ltd. (Rs. 3232.80,+1.09 per cent), Mahindra & Mahindra Ltd. (Rs. 1186.00,+0.92 per cent), among others.

Meanwhile, Sun Pharmaceutical Industries Ltd. (Rs. 676.95,-4.11 per cent), Tata Consultancy Services Ltd. (Rs. 2169.80,-0.94 per cent), Lupin Ltd. (Rs. 1518.50,-0.62 per cent), Infosys Ltd. (Rs. 963.00,-0.41 per cent), Wipro Ltd. (Rs. 455.80,-0.39 per cent), were among the top losers on BSE.

The Market breadth, indicating the overall strength of the market, was strong. On BSE out of total 2537 shares traded, 1425 shares advanced, 956 shares declined while 156 were unchanged.

On the global front, Asian stocks were trading higher today as investors shrugged-off defeat of Italy’s constitutional referendum and shifted their focus to the upcoming policy meeting of the European Central Bank and also the US monetary policy due in December. US stocks closed higher in the previous trading session with the Dow Jones industrial hitting another record high as strong services sector data pointed to a strengthening economy.

Sensex up 52 pts; RBI policy meet eyed

07/12/2016 11:43

Indian equity benchmarks continued to trade in the positive territory during the late morning deals on Wednesday as participants raised bets for rate cut ahead of the RBI policy meet scheduled for later in the day amid positive cues from fellow Asian peers.

At 11:10 hours, the 30-share barometer index of Bombay Stock Exchange, Sensex was at 26,444.98, up by 52.22 points or 0.2 per cent while the NSE Nifty was at 8,163.5 up by 20.35 points or 0.25 per cent.

The RBI policy meet will be the first after demonetisation and traders are expecting a rate cut of at least 25 basis-points in the RBI’s two day bi-monthly monetary policy review, supported sentiment at D-street.

Buying momentum was witnessed mainly in the oil & gas and public sector undertaking sector stocks.

The top gainers of the BSE Sensex pack were Adani Ports & Special Economic Zone Ltd. (Rs. 276.25,+1.54%), Housing Development Finance Corporation Ltd. (Rs. 1260.00,+1.30%), Hero MotoCorp Ltd. (Rs. 3237.40,+1.23%), NTPC Ltd. (Rs. 165.00,+0.98%), Bharti Airtel Ltd. (Rs. 331.90,+0.87%), among others.

Major show spoilers were Sun Pharmaceutical Industries Ltd. (Rs. 677.90,-3.98%), Tata Consultancy Services Ltd. (Rs. 2171.15,-0.88%), Lupin Ltd. (Rs. 1523.00,-0.33%), ITC Ltd. (Rs. 229.60,-0.28%), Dr. Reddy’s Laboratories Ltd. (Rs. 3180.50,-0.27%), among others.

The market breadth, indicating the overall strength of the market, was positive. On BSE, out of the total 2,289 shares traded, 1,381 advanced while 782 shares declined and 126 remained unchanged.

On the global front, Asian markets were trading in the green as investors shrugged-off defeat of Italy’s constitutional referendum and shifted their focus to the upcoming policy meeting of the European Central Bank and also the US monetary policy due in December.