Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: ACCOUNTING STANDARDS :: list of goods taxed at 4% :: form 3cd :: articles on VAT and GST in India :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: Central Excise rule to resale the machines to a new company :: VAT Audit :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: ACCOUNTING STANDARD
 
 
General »
 Simplified one page Income Tax Return Form: Changes to keep in mind before filing tax return for AY2017-18
  No proposal to replace Income Tax with Banking Cash Transaction Tax
 GST coming July 1 despite calls for delay: Revenue Secretary Hasmukh Adhia
 Centre introduces provision of taxation on NPS in Income Tax Act
 Income Tax Department Clarifies On Cash Withdrawal From Banks, Post Offices
 The Goods And Services Tax (Compensation To States) Bill, 2017
  Goods and Service Tax (GST) and Real Estate Sector
 New Income Tax Rules On Home Loan Come Into Effect
 Here's how late filers can save on stress and taxes
 Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib ?Kalyan Yojana, 2016
 Companies should invest in upgradation of tax technology

Huge surplus SLR will provide the required liquidity buffer
December, 20th 2010

The markets ended last week with a large shortage of liquidity, aggregating at . 1,40,000 crore, after the tax outflows exited the system. With the new fortnight beginning this week, banks are expected to cover CRR requirements aggressively , and thus call rates could remain in the 6.75-7 % range. While demand for money would be strong, the large surplus SLR in the system would provide the necessary liquidity cushion.

Overall incremental liquidity would be balanced, as the slated outflows of . 11,000 crore on account of the central government auctions would be offset with the . 12,000-crore weekly open market operations (OMO) announced last week. The slated state government auctions of . 3,600 crore also should be offset by net maturing Treasury Bill amounts. Thus, the call rates are expected not to spike. However, inter-bank term rates, especially the 4-month tenor and beyond would remain bid. Certificate of deposit rates would find a good support at 9.50% for 1-year tenor, though 3-month CDs should remain capped at around 9%.

About the government securities, benchmark 7.80% 2020 had ended last week on a positive note at 7.94%. We expect the OMO to show aggressive buyback prices to boost liquidity in the system, and that should keep security prices underpinned . The markets would keenly await announcement of security details and good buying interest could be seen in those securities as well as in the state government auctions.

However, markets would continue to remain overall cautious , keeping a wary eye on liquidity. Deposit growth in the markets at around 16% has been lagging the advances growth by a large margin, and the next quarter would also see some disinvestments as well as further advances growth. The recent hikes in base rates by some banks and also deposit rate hikes could correct this imbalance partly. Markets would also remain cognisant of the fact that food inflation has remained sticky, although at lower levels. US interest rates have also shown a sharp spike recently and global commodities prices also have remained bid.

Also, increasingly, as the base-year effect wears off, we could see inflation fears resurfacing, and rate hike possibilities would remain high. Thus, security prices would not show any runaway moves, and would be ranged.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Organic SEO Outsourcing Organic Search Engine Optimization Outsourcing Organic Website SEO Organic SEO India Website SEO India Organic Search Engine Optimization India Organic Internet SEO India Organic Web

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions