NEW DELHI: Even as the RBI has cut repo rate by 125 basis points and has proactively injected/announced Rs 6.6 lakh crore in the current fiscal as part of open market operations (OMO), yields are refusing to budge down, as such level of liquidity management has resulted in asymmetric transmission across market segments, an SBI Research report said on Wednesday.
This is unprecedented as this is the largest OMO in the history of monetary management. Factoring in the CRR injection, the buy/sell swap, the currency leakage, total liquidity injection is around Rs 5.5 lakh crore, the report mentioned.
“Firstly, the good thing. Owing to higher decline in bank lending rate commensurate to the corporate bond yield the pricing gap has narrowed down, thereby making corporates shifting back to banks for loans with bank credit now being more lucrative than market borrowing, ” said Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.