The centre and state governments likely to reduce taxes to bring down high fuel prices
The Reserve Bank of India (RBI) did not compromise on its balance sheet while providing liquidity to the bond market through asset purchases, governor Shaktikanta Das said on Thursday. The central bank, so far, this fiscal, has purchased over Rs 3 trillion of central and state government bonds from the secondary market to provide liquidity to the system.
Unlike many central banks, though, the RBI’s asset purchases “did not dilute its balance sheet and hence, did not compromise on core principles of central banking.”
The purchases were risk-free government bonds only, he said. “The focus was to foster congenial financing conditions without jeopardising financial stability,” Das said in his keynote address at the foundation day of the Bombay Chamber of Commerce. In this period, forward guidance gained prominence in the Reserve Bank’s communication strategy to realise co-operative outcomes, he said, adding, the central bank will “continue to support the recovery process through the provision of ample liquidity in the system, while maintaining financial stability.”
The 10-year bond yields remained flat before and after the speech at 6.16 per cent.The RBI governor, in the question and answer session after the address, said “a lot is going on internally” with regards to a central bank digital currency. The RBI will come out soon with some broad guidelines and approach “very shortly.” However, there are a few issues that need to be sorted out internally and it is a work in progress…Read mMore
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