RBI ready to inject Rs 30,000 crore in the form of bonds to boost liquidity:
RBI ready: The Reserve Bank of India (RBI) on Friday discussed the actions that need to be taken against the Covid-19 impacting economic growth. However, we can improve economic growth by injecting more liquidity into the society. The Reserve Bank of India (RBI) Governor Shaktikanta Das said, the responsibility of the central bank to maintain the reserves and give assurance to every depositor in Yes Bank.
Whereas, the Reserve Bank of India (RBI) policy meeting held in the last month. Where RBI decided to inject Rs 2.5 lakh crore in the banking system. However, the financial assets across the globe are suffering against dangerous coronavirus.
Meanwhile, RBI decided to buy ready to inject Rs 30,000 crores in the form of bonds through “open market operations” (OMO). The RBI announced his first OMO purchase in the last two months stands at Rs 10,000 crore. However, the Reserve Bank of India is likely to buy the bonds through OMO and the auction will take place from Tuesday.
The auction will take place next week with a set of four bonds. The bonds that include maturing in three, five, six, and nine years are traded. Besides, the RBI conducted a review meeting on the present financial and liquidity conditions and decided to buy government securities under OMO with Rs 30,000 crore in two phases. The first phase of the auction will take place next Tuesday. This decision of buying bonds through OMO improves stability in the exchange rate.
Besides, RBI is hoping that enough liquidity in the system will provide to take any wild decisions due to the global crisis caused by Covid-19, said Ritesh Bhusari, Deputy General Manager, South Indian Bank. The RBI didn’t provide any rate cuts and its main focus on liquidity in the market.
However, on Friday, the benchmark bond yield dropped 15 bps, which pushes the price value up. The bond yield settled at 6.26% on Friday as against 6.41% on the day before.
In February bi-monthly policy RBI announced its first long-term repo operations (LTRO) to inject liquidity almost Rs 1 lakh crore. After this, the RBI announced similar measures against the liquidity this week. Besides, the Reserve Bank of India (RBI) decided to conduct the dollar-swap auction for $2 billion. Here, the injected dollar liquidity and the same operation will be conducted next Monday.
On the other side, both Sensex and Nifty bounce back to the bullish trend in the stock market. On Friday, the bulls show more impact than bears in the last two weeks. The Sensex gained 1,627.73 points with a 5.75% increase and reached a 29,915.96 level. While Nifty gained 482.00 points with a 5.83% increase and reached 8,745.45 level.
However, after lifting the ban on Yes Bank, the shares of the bank reporting bearish trend in the stock market. The Bank on Friday lost 7.90 points with a 14.67% decrease and reached 45.95 INR. While in BSE, the bank lost 8.00 points with a 14.84% decrease and reached 45.90 INR.
Top Gainers: Bharti Infratel, ONGC, GAIL, UltraTechCement, HUL are the top gainers in the stock market on Friday.
Top Losers: Yes Bank, HDFC Bank, IndusInd Bank, Adani Ports, and Axis Bank are the top losers in the stock market on Friday.