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Firms raising 3-month money at much lower than RBI's overnight rates

Even as FCI is raising Rs 75,000 cr for three months at 4.69%, companies are regularly tapping bond market for the same tenure at as low as 3.2%, way lower than RBI's repo rate of 4%

Topics
Reserve Bank of India | Food Corporation of India | MCLR

Anup Roy  |  Mumbai 

The cost of short-term borrowing from markets has plummeted for firms, even below the overnight repo rate, thanks to the Reserve Bank of India’s (RBI) bond yields and liquidity-supporting measures. Most entities are avoiding the long-term corporate bond route, given the slump in the economy.

Instead, they are managing with working capital loans raised at ultra-low rates from the bond markets. Meanwhile, banks are looking for safe bets to give loans, given the huge liquidity they are sitting on. Food Corporation of India (FCI) is said to have borrowed Rs 75,000 ...

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First Published: Thu, September 03 2020. 14:02 IST
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