Central Banks
RBI May Need to Buy $18 Billion of Bonds to Add Cash, ICICI Says
- Cash reserve ratio cut of 50 basis points may happen in FY2H
- 5-year bond yield can drop to 6.80%, ICICI’s Prasanna says
The Reserve Bank of India (RBI) headquarters in Mumbai.
Photographer: Indranil Aditya/BloombergThis article is for subscribers only.
India’s central bank may buy as much as 1.5 trillion rupees ($18 billion) of government bonds to replenish banking liquidity that’s expected to tighten later in the year, according to a top banker.
The Reserve Bank of India may cut the cash reserve ratio by half a point in the fiscal second half and start buying bonds in the December quarter to keep banking liquidity at current levels, B. Prasanna, group head for global markets sales, trading and research at ICICI Bank Ltd, the nation’s second-largest private lender by market value, said in an interview Monday.