Skip to main content

RBI auctions treasury bill worth Rs 60,000 cr under MSS

By
The RBI today auctioned the 35 days Cash Management Bills worth Rs 60,000 crore under government's Market Stabilisation Scheme (MSS) to mop up extra liquidity from the system against the backdrop of demonetisation.
The central bank will also conduct an auction of 35 days Cash Management Bills under the MSS for Rs 60,000 crore tomorrow.
On Friday, the central bank had auctioned MSS worth Rs 20,000 crore, after MSS ceiling was raised to Rs 6 lakh crore.
The Cash Management Bills for a notified amount of Rs 60,000 crore was done using "Multiple Price Auction" method.

The bids for the auction were submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

The Cash Management Bills have the generic character of Treasury Bills.
After the withdrawal of the legal tender character of the Rs 500/1,000 denomination notes with effect from November 9, there has been a surge in deposits with the banks, the RBI had said.

There has been a significant increase of liquidity in the banking system that is expected to continue for some time.

"In order to facilitate liquidity management operations by the RBI in the current scenario, the government has, on the recommendation of the RBI, decided to revise the ceiling for issue of securities under the MSS to Rs 6,000 billion," it added.

MSS bonds are issued with the objective of providing the central bank with a stock of securities with which it can intervene in the market for managing liquidity. These securities are not issued to meet government's expenditure.

As part of liquidity management exercise, the RBI had earlier asked lenders to temporarily maintain an incremental cash reserve ratio (CRR) of 100 per cent.

CRR is the portion of the deposits banks are required to park with the Reserve Bank. The actual current rate of CRR is 4 per cent.

Meanwhile, the government has announced to sell four dated securities for Rs 14,000 crore on December 09, 2016.

The auctions will be conducted using multiple price method. Up to 5 per cent of the amount of the sale of the stocks will be allotted to eligible individuals and Institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities.
Business Standard New Delhi,06th December 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more