LIQUIDATION
Understand the March mayhem, because it will happen again. What is behind the liquidity squeeze and why it matters to the stock market
Every March, India’s financial system, particularly the banking system, experiences a liquidity squeeze, pushing up short-term interest rates and making credit harder to come by. This isn’t unexpected. It has happened many times in the past and will happen in the future as well. So, better to understand it. Because, for some, March is the month for panic; but for others, it is the month of opportunity.
Gensol Engineering board approves 1:10 stock split, fundraising up to $50 million
Gensol Engineering stock split: Gensol Engineering's board approved a 1:10 stock split to enhance liquidity and attract retail investors. Additionally, the company plans to raise $50 million via FCCBs, ADRs, and other securities. The record date for eligibility will be announced later.
Keki Mistry expects GDP growth to touch 7% in H2; says 3 sectors will do well now
Keki Mistry anticipates India's growth to reach or closely approach 7% in the latter half of the year, contingent on positive monsoons and low food prices. He suggests the Reserve Bank of India might expedite rate cuts and liquidity measures to boost economic growth. Key sectors expected to benefit include FMCG, retail, and IT, particularly due to currency depreciation.
Cement, Metals and Consumption: Pankaj Tibrewal’s top sectoral bets for FY26
The RBI policy pivot is a very important and substantial move from a macroeconomic perspective and over the next few quarters we will start seeing the impact at the ground level. The second is the government capex.
RBI rate cut ahead: Axis MF shares view on Indian bond market, answers what should investors do?
The Indian bond market remains resilient amid global volatility as the RBI implements liquidity measures and rate cuts, with predictions of further reductions. Key economic indicators show easing inflation, improved GDP growth, and stable demand-supply dynamics. Investors are advised to focus on long-duration bonds and gilt funds for potential gains, despite ongoing risks such as currency fluctuations and US policies.
RBI gets twice the bids for Rs 50,000-crore OMO
The discount in the auction on Wednesday was 30 paise, while the previous OMO auctions have seen discounts of 40-50 paise. The next OMO purchase is scheduled for March 18, where the liquidity deficit is expected to widen after quarterly advance tax-related outflows.
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I am 57 years old and have property worth Rs 5.35 crore. Should I shift investment to MFs for easier access to funds?
Should I liquidate my real estate investments and invest in mutual funds? Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away.
Lazy in largecaps, choosy in midcaps, and avoid the smallcaps? Here’s what Harsha Upadhyaya has to say
Harsha Upadhyaya, CIO-Equity of Kotak AMC, highlights the overvaluation in Indian markets, especially in mid and smallcaps. He suggests being cautious and selective in these sectors due to their high premiums and muted earnings growth. Largecap banks, private and PSUs, offer valuation comfort, along with sectors like specialty chemicals, industrials, telecom, and cement after correction.
How Pi42 is changing the game for crypto institutions: Avinash Shekhar & Sudhakar Pradhan explain
The crypto market is evolving, and institutions are significantly influencing its future. Avinash Shekhar and Sudhakar Pradhan from Pi42 discuss building a crypto-native liquidity platform, covering essential trading terms, market strategies, and the impact of global events and psychological price levels on Bitcoin and Ethereum.
Puneet Pal advises investors to brace for RBI rate cut, falling bond yields in April- Here’s what they should do?
The Indian bond market remains steady amid expectations of a potential rate cut by the RBI in April, driven by anticipated sub-4% CPI print. Puneet Pal of PGIM India Mutual Fund predicts steepening of the yield curve and a liquidity surplus in the banking system. Investors are advised to focus on Short-Term/Corporate Bond Funds.
Won't rejoice on approval of scheme;team will work hard to return value to users: WazirX Founder
Faced with an existential crisis after USD 230 million crypto heist last year, WazirX is "hopeful" of securing adequate votes from users in favour of its upcoming scheme of arrangement, with founder Nischal Shetty asserting that while being legally binding, the scheme will allow the company a fighting chance to re-build value in "golden era of crypto" market.
How to get loan against mutual fund investment
A loan against mutual funds is an effective way for investors to access liquidity without redeeming their investments. This facility allows individuals to pledge their mutual fund holdings as collateral to secure a loan from banks or financial institutions. This is ideal for short-term liquidity needs.
Impossible trinity problem causes a cash crunch in Asia
China's overnight and seven-day repo rates surged in February, while bond investors took losses from a sharp rise in yields. Banking liquidity in India suffered its highest deficit in at least 14 years earlier this year and overnight borrowing costs jumped. Liquidity also dried up in Indonesia and Malaysia following central bank currency interventions.
Keep hungry credit market well-Fed
RBI is addressing the money market's liquidity needs by implementing open market operations and currency swaps to stabilize the rupee and ensure steady domestic interest rates. Despite narrowing the liquidity deficit recently, ongoing measures are necessary, especially with the potential impact of Trumponomics and upcoming tax payments.
‘Impossible trinity’ conundrum has caused a cash crunch in Asia
Central banks in China, India, and other Asian countries are struggling to manage their currencies and economic growth amid a strong dollar. Their interventions have driven up local borrowing costs, tightening banking liquidity and risking economic slowdown. As a result, countries like India are injecting liquidity, while others face uncertainty due to global trade dynamics.
RBI liquidity injection and its impact on the bond market
The Reserve Bank of India (RBI) plans to inject Rs 1 lakh crore through OMOs and conduct a USD INR swap auction worth $10bn to address liquidity shortages. This strategic move aims to stabilize the economy by mitigating the liquidity crunch and balancing rupee volatility with maintaining market liquidity.
RBI's VRR auctions see muted response on easing liquidity
The Reserve Bank of India's recent auctions to inject funds into the banking system saw lukewarm interest due to improving liquidity conditions. Despite a persisting liquidity deficit, it has narrowed significantly in March. Market participants remain optimistic about further RBI measures to manage advance tax and GST outflows.
WazirX’s Proposed Scheme of Arrangement: A Path to Recovery and Future Stability for Users
WazirX proposes a Scheme of Arrangement to recover $234 million lost in a cyberattack by North Korean hackers, aiming to redistribute assets and resume operations. Benefits include quicker asset access, improved recoveries, and user involvement, with voting set for March 2025.
India set to overcome worst cash crunch in years on RBI steps
India is addressing one of its worst liquidity deficits through aggressive steps by the Reserve Bank of India, which has injected about $68 billion into the financial system since late January. These efforts are expected to create a liquidity surplus by the end of March, aiding better transmission of interest-rate cuts and supporting economic growth.
Banking Liquidity will come into a strong surplus by March end: UBI report
India's banking sector liquidity is expected to shift to a strong surplus by March 2025 due to the Reserve Bank of India's Rs 1.9 lakh crore liquidity measures. Short-term challenges like GST outflows may tighten conditions temporarily, but overall improvement is anticipated by the financial year's end.
RBI's 14-day VRR auction for Rs 50,000 cr on March 7
This is likely to offset outflows that would happen after corporates pay their quarterly advance taxes by March 15, economists said. The VRR auction comes one day after the RBI announced additional liquidity measures comprising ?1 lakh crore of open market operations (OMOs) and $10 billion of dollar-rupee buy-sell swaps.
RBI signals intent to ensure banking liquidity surplus, analysts say
The Indian central bank's bond purchases and FX swaps aim to maintain surplus liquidity in the banking system, helping banks pass on rate cuts to consumers and steepen the yield curve. These actions, following a period of liquidity deficit, ensure effective monetary policy transmission and support growth. The RBI's efforts are intended to stabilize rupee liquidity and aid market conditions.
Bank, NBFC stocks in focus on RBI’s plans to inject Rs 1.9 lakh cr liquidity
The RBI had previously conducted a $10 billion dollar-rupee swap on February 28 to inject long-term liquidity into the system, which saw strong demand.
RBI's record $77.5 billion short positions may impact rupee liquidity and forex reserves
The Reserve Bank of India (RBI) holds a record $77.5 billion in net short dollar positions, which may need to be rolled over to avoid affecting rupee liquidity. Managing the maturity of these positions is crucial as any unwinding could impact foreign exchange reserves, currently at $640 billion, and the credibility of the spot reserve number.
RBI announces Rs 1 lakh crore bond purchases, $10 billion swap to address liquidity deficit
The Reserve Bank of India announced measures to inject ?1 lakh crore into the banking system and conduct a dollar/rupee swap auction of $10 billion. These steps aim to address the liquidity deficit and ensure the smooth transmission of lower policy rates amid expected tax outflows.
RBI to conduct OMOs worth Rs 1 lakh crore, $10 billion forex swap auction to manage liquidity conditions
The Reserve Bank of India will conduct two tranches of open market operations and a dollar/rupee buy/sell swap to infuse liquidity into the banking system. The operations will occur on March 12, 18, and 24, addressing the significant deterioration in banking liquidity conditions observed in recent months.
RBI will have to cut CRR to ease banking liquidity; Mahakumbh leads to significant cash withdrawals: SBI Report
The Reserve Bank of India may need to cut the Cash Reserve Ratio to alleviate the current liquidity pressure in the banking sector, according to an SBI research report. The report suggests using CRR as a regulatory intervention tool rather than relying on it solely for liquidity. A CRR cut would help stabilize liquidity and ensure smoother financial operations.
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