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: list of goods taxed at 4% :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: ACCOUNTING STANDARDS :: VAT RATES :: form 3cd :: articles on VAT and GST in India :: ACCOUNTING STANDARD
 
 
General »
 Companies should invest in upgradation of tax technology
 Top House tax writer suggests measures to mitigate the impact of the border tax
 Consumer goods distributors, wholesalers to bear the brunt of GST
 GST classification woes to continue
 There will be no tax on farm or agriculture income
 RBI, Income Tax Acts to be amended for electoral bonds, Jaitley says
  Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016
 I-T zeroes in on Mumbai trader in first crackdown after demonetisation
  Tax queries answered by Dilip Lakhani, Senior Chartered Accountant
 Income Tax Department Failed To Unearth Black Money Despite Information
 Govt filing twice as many cases as private cos in Supreme Court

Long-term rates remain high while short-term interest rates fall
January, 06th 2011

Short-term interest rates eased as liquidity returned to the system. However, long-term rates still continue to remain high.

Interest rates on the 3-month certificate of deposit, or CD rates, dropped to 8.73% from the previous close of 9.05%. One-year CD rates slipped to 9.48% at the turn of the year from the previous close of 9.70%. But at the same time, the yield on the benchmark 10-year government bond fell only by 1 basis point, closing at 8.06%.

Bond market dealers said the Central government transferred around Rs 40,000 crore to states between December 27 and December29, which found its way into the banking system, adding to the liquidity. Besides, RBI also bought back four government securities worth Rs 10,000 crore, releasing an equivalent amount into the system.

Bankers think the liquidity is here to stay, though upward bias in interest rates is likely to continue. Ramesh Kshirsagar, head of treasuries, Bank of Maharashtra , said, The borrowing from RBI has come down from Rs 108 lakh crore to almost half of it. But its only the short-term rates which have come down, rates in the securities market are still soaring.

According to a senior official from the Corporation Bank , It is the government spending which has eased the liquidity in the system. This has little to do with RBIs efforts in easing liquidity, except its open market operations. Also, the credit growth is slowing as the cost of credit has gone up.

Market players are sceptical about the responsiveness of the securities being bought back by RBI. Bankers are doubtful about the responsiveness of these securities, due to large gap in the holding costs of these securities and the market prices, said Mr Kshirsagar.

The banks borrowed a sum of Rs 87,890 crore from RBI against government securities, which was slightly higher than the borrowing on the previous day, which was about Rs 68,150 crore. The liquidity in the system had eased on back of government spending from a net borrowing of Rs 1.02 lakh crore even on January 3.

According to Mr Khirsagar, this liquidity is well within the comfort of RBI, though the fear of rate hikes remains.

The four securities bought back by RBI were, 17% 2015, 7.99% 2017, 6.90% 2019 and 7.94% 2021 bond.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

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