Anjali Kumari
Anjali Kumari
Government bond yields rose as traders booked profits following RBI's 50 basis point repo rate cut and change in policy stance, impacting market sentiment
With net banking system liquidity in a surplus and muted demand from lenders, RBI discontinues daily Variable Rate Repo auctions introduced in January
Following RBI's guidance and a CRR cut, dealers expect government bond yields to settle into a range between 6.12 and 6.28 per cent over the next few months
Bond yields swung sharply after RBI's 50 bps rate cut, neutral stance, and CRR changes surprised investors, marking the most volatile day in nearly three years
The cut in CRR would release primary liquidity of about Rs 2.5 lakh crore to the banking system by December 2025
The central bank's forward book saw a drop from $78 billion in February to $52.4 billion in April, with a majority of positions concentrated in the 3-12 month segment
Cash reserve ratio cut by 100 basis points to 3%, adding to already surplus liquidity
May sees Rs 20,996 crore in foreign corporate bond investments, led by SP Group's $3.35 billion issue; RBI's relaxed norms add to momentum
"This is because the system liquidity surplus is almost Rs 3 trillion and there are expectations of a deeper rate cut," said Anshul Chandak, Head of Treasury at RBL Bank
The six member monetary policy of the RBI has reduced the policy repo rate by 25 bps each in the two previous policy review meetings, in February and April
The SDF window, which came into effect from April 2022, offers 25 bps lower than the policy repo rate
The local currency settled at 85.38 per dollar, against the previous close of 85.58 per dollar. It has appreciated by 0.1 per cent against the dollar in the current financial year
RBI expected to lower inflation projection for FY26
The government will repurchase select 2026 and 2027 securities via an RBI auction to reduce liabilities and improve the fiscal and debt profile
Central bank also likely to assess liquidity level needed for policy transmission
Primary corporate bond issuances during the year rose by 16.1 per cent to ₹9.9 trillion, up from ₹8.6 trillion in 2023-24
LIC fully subscribes to Adani Ports' Rs 5,000 crore 15-year bond issue at 7.75% in a privately negotiated deal, as other firms struggle to raise targeted amounts
Corporate bond yields declined in FY25 but lagged G-sec yields, widening spreads; private placements led issuances and FPI limit usage dipped slightly, shows the RBI report
CPI inflation dropped to 3.16% in April 2025, its lowest since July 2019, but the RBI warns of uncertainties from global conflicts, trade shifts and weather conditions
On Thursday, Indian companies plan to raise over ₹13,000 crore via debt sale