Rbi May Extend Special Repo Line To Uti

The Reserve Bank of India is exploring the possibility of a special repurchase (repo) arrangement with the beleaguered Unit Trust of India (UTI).

The objective behind this arrangement is two-fold: to offer temporary liquidity support to the mutual fund as well as protect the government securities market from crashing.

According to sources, the apex bank is afraid that if UTI starts offloading its gilts portfolio in the secondary market in a big way, gilts prices will crash distorting the yield curb. UTI