RBI restores bond market timings. What you need to know

 

• The Monetary Policy Committee (MPC), consisting of three members from RBI and three outside members, in a majority decision raised the key lending rate or repo rate to 6.25%

Taking a step towards normal liquidity operations, the Reserve Bank of India on Wednesday extended market hours - 9 a.m. to 5 p.m. - in respect of calls/notices/repos in fixed money, commercial paper, certificate of deposits and corporate bond segments. decided to restore. For money market as well as rupee interest rate derivatives.

“The extension of time for HTM classification of fresh bank investments in bonds till March 2024 paves the way for stability in the bond market/financial sector and future government borrowings. Overall pragmatic revision of monetary policy by RBI in view of uncertainties and volatility on both domestic and international fronts, said Divam Sharma, co-founder, Green Portfolio.

Meanwhile, the Reserve Bank of India's key repo rate today rose by 35 basis points (bps), a fifth straight hike as was widely expected, as the central bank vowed that there would be no more cuts in its fight to tame high inflation. Will not leave any stone unturned.

The Monetary Policy Committee (MPC), comprising three members from RBI and three external members, in a majority decision raised the key lending rate or repo rate to 6.25%. Five of the six members voted in favor of the increase.

RBI Governor Shaktikanta Das said the main risk is that inflation will remain firm and high.

Announcing the decision of the Monetary Policy Committee, Das said, "The MPC was of the view that further calibrated monetary policy action was needed to stabilize inflation expectations, break the persistence of core inflation and prevent second round effects "

"The focus on controlling inflation continues. There will be no let up in our efforts to bring inflation down to more manageable levels," he said.

The MPC cut its GDP growth forecast for fiscal year 2022/23 to 6.8% from 7%, while keeping its retail inflation forecast steady at 6.7%.

"Growth in India remains resilient in the international environment. Growth (rate) of 6.8% is strong," Das said.