Latest news with #G-sec
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India.com
10 hours ago
- Business
- India.com
Another RBI Rate Cut To Spark Affordable Real Estate Momentum: Experts
New Delhi: As the Reserve Bank of India (RBI) prepares for its monetary policy committee (MPC) meeting this week, industry experts said on Tuesday that the transmission of rate cuts into lower borrowing costs is vital to sustain residential real estate demand — particularly in the affordable housing segment, which is sensitive to interest rate movements. Given the prevailing benign inflation environment and the GDP growth of 6.5 per cent recorded in FY2025, the Reserve Bank is likely to proceed with a 25-bps repo rate cut this Friday (June 6). 'The case for a rate cut is further supported by the revival in the liquidity conditions to a surplus of Rs 3.6 lakh crore, which enhances the effectiveness of monetary transmission. Additionally, the softening of G-sec yields reflects bond market confidence in the RBI's inflation and liquidity management and strengthens the rationale for easing rates,' said Shishir Baijal, Chairman and Managing Director, Knight Frank India. With the anticipated rate cut, the cumulative reduction in the policy rate in this cycle would be 75 bps. However, the focus must now shift to the pace and breadth of transmission. 'While some commercial banks have begun to lower their MCLR and base rates, the adjustments have been modest. With liquidity conditions stabilising, there is now greater scope for commercial banks to accelerate the pass-through of policy easing to borrowers. This will be key to spurring consumer demand and private investment, ultimately supporting economic growth,' Baijal noted. The Central Bank is projected to cut the repo rate by another 50 basis points (bps) this fiscal (FY26), after the 50 bps cut until April this year. Bank lending rates have begun easing, which should support domestic demand, according to a latest Crisil note. Experts said that with EMIs constituting a significant share of monthly income in affordable category, even a modest reduction in lending rates can influence buying decisions, providing the necessary momentum to support this price-sensitive demand segment.
Hans India
11 hours ago
- Business
- Hans India
Another RBI rate cut to spark affordable real estate momentum: Experts
New Delhi: As the Reserve Bank of India (RBI) prepares for its monetary policy committee (MPC) meeting this week, industry experts said on Tuesday that the transmission of rate cuts into lower borrowing costs is vital to sustain residential real estate demand — particularly in the affordable housing segment, which is sensitive to interest rate movements. Given the prevailing benign inflation environment and the GDP growth of 6.5 per cent recorded in FY2025, the Reserve Bank is likely to proceed with a 25-bps repo rate cut this Friday (June 6). 'The case for a rate cut is further supported by the revival in the liquidity conditions to a surplus of Rs 3.6 lakh crore, which enhances the effectiveness of monetary transmission. Additionally, the softening of G-sec yields reflects bond market confidence in the RBI's inflation and liquidity management and strengthens the rationale for easing rates,' said Shishir Baijal, Chairman and Managing Director, Knight Frank India. With the anticipated rate cut, the cumulative reduction in the policy rate in this cycle would be 75 bps. However, the focus must now shift to the pace and breadth of transmission. 'While some commercial banks have begun to lower their MCLR and base rates, the adjustments have been modest. With liquidity conditions stabilising, there is now greater scope for commercial banks to accelerate the pass-through of policy easing to borrowers. This will be key to spurring consumer demand and private investment, ultimately supporting economic growth,' Baijal noted. The Central Bank is projected to cut the repo rate by another 50 basis points (bps) this fiscal (FY26), after the 50 bps cut until April this year. Bank lending rates have begun easing, which should support domestic demand, according to a latest Crisil note. Experts said that with EMIs constituting a significant share of monthly income in affordable category, even a modest reduction in lending rates can influence buying decisions, providing the necessary momentum to support this price-sensitive demand segment.
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Business Standard
5 days ago
- Business
- Business Standard
FPIs' investment in corporate bonds rises 11.4% in FY25: RBI report
Investments by foreign portfolio investors (FPIs) in corporate bonds grew by 11.4 per cent in 2024–25, rising from ₹1.08 trillion in 2023–24 to ₹1.21 trillion in FY25, according to the Reserve Bank of India's Annual Report 2024–25. However, utilisation of the approved investment limits declined slightly to 15.8 per cent as of end-March 2025, down from 16.2 per cent a year earlier, primarily due to an expansion in the absolute investment limits for FPIs, the report said. Primary corporate bond issuances during the year rose by 16.1 per cent to ₹9.9 trillion, up from ₹8.6 trillion in 2023–24. Outstanding corporate bonds (as of end-December) also increased by 13.3 per cent, reaching ₹51.6 trillion compared to ₹45.5 trillion in the previous year, the report noted. Additionally, primary issuances of listed corporate bonds on domestic stock exchanges increased in the year, along with higher mobilisation through overseas markets. Private placements continued to dominate as the preferred mode of issuance, accounting for 99.2 per cent of total funds raised in the domestic bond market. The report highlighted that average daily turnover in the secondary market rose to ₹7,645 crore in 2024–25, up from ₹5,722 crore in the previous financial year. 'Average daily turnover in the secondary market on corporate bonds increased to ₹7,645 crore during 2024–25 from ₹5,722 crore during the previous year,' it stated. Corporate bond yields declined in line with government securities (G-sec) yields, with the average yield on AAA-rated 3-year bonds falling by 15 basis points (bps) for public sector undertakings (PSUs), financial institutions (FIs), and banks; 28 bps for non-banking financial companies (NBFCs); and 33 bps for corporates as of March 2025 compared to March 2024. However, the spread between these corporate bond yields and G-sec yields of similar maturity widened, indicating that the drop in corporate bond yields lagged the decline in G-sec yields. 'Corporate bond yields softened during 2024–25, mirroring G-sec yields. The monthly average yield on AAA-rated 3-year bonds of PSUs, FIs and banks; NBFCs; and corporates fell by 15 bps, 28 bps and 33 bps, respectively, in March 2025 vis-à-vis March 2024,' the report added.
India Gazette
5 days ago
- Business
- India Gazette
Daily volume in money market surged by 10% YoY to Rs 5.5 lakh crore in FY25: RBI
Mumbai (Maharashtra) [India], May 29 (ANI): The Reserve Bank of India (RBI) has reported a sharp rise in money market activity and sustained momentum in bank credit growth during the financial year 2024-25. According to the central bank's latest report, the average daily volume in the money market rose by 10 per cent to Rs 5.5 lakh crore during 2024-25 compared to the previous year. The report noted that both bank deposits and credit continued to grow at a double-digit pace during the year. Although deposit growth lagged behind credit growth, however the gap narrowed over the course of the year. Notably, public sector banks (PSBs) recorded higher credit growth than private sector banks, highlighting their active lending approach. According to the report, bank credit expansion was broad-based, with strong contributions from the retail, services, and agriculture sectors. The central bank stated that credit to agriculture and allied activities maintained double-digit growth throughout the year. Industrial credit remained robust, supported by a pick-up in lending to medium and large industries. However, credit to micro and small industries showed some moderation in recent terms of interest rates, the report said money market rates remained broadly aligned with the policy repo rate throughout 2024-25. Meanwhile, government securities (G-sec) yields softened and showed less volatility compared to global and emerging market counterparts. The Indian rupee (INR) witnessed a depreciating trend in the second half of the year due to a stronger US dollar and equity portfolio outflows. The report also provided a detailed quarterly analysis of Government Securities yield movements. The first quarter (Q1:2024-25) saw G-sec yields move both ways. Yields initially rose due to foreign portfolio investment (FPI) outflows and rising crude oil prices. However, they softened later following the RBI's record surplus transfer to the government. The second quarter (Q2:2024-25) witnessed a steeper yield curve, with short-term G-sec yields falling more than long-term ones. This was driven by declining crude oil prices, steady FPI inflows, and the start of a global rate-cutting cycle, including a 50-basis point cut by the US Federal Reserve. The third quarter saw range-bound movements in G-sec yields. Upward pressure from rising US Treasury yields and domestic inflation was partially offset. Q4:2024-25 experienced a downward trend in yields due to liquidity infusion measures and the RBI's move to ease monetary policy. By the end of the financial year, the 10-year generic G-sec yield stood at 7.01 per cent, marking a 5 basis point decline from its level at the end of March 2024. (ANI)
India.com
23-05-2025
- Business
- India.com
Rs 27,000 Crore Government Securities Auction Fully Subscribed
New Delhi: Government securities (G-sec) auctioned Rs. 27,000 crore bonds in two tranches on Friday. On May 22, it was fully subscribed, reflecting strong investor demand. The cut off price for both bonds was above par. The 6.75 per cent G-sec with a notified amount of Rs 15,000 crore, maturing in 2029, was sold at a cut-off price of Rs 103.49, yielding 5.8675 per cent. The 7.09 per cent G-sec with a notified amount of Rs 12,000 crore, maturing in 2054, was sold at a cut off price of Rs 103.39, yielding 6.8197 per cent. The bond yield is the return an investor expects to receive each year over its term to maturity. As per the auction results, the development of primary dealers was stated as 'NIL' for both the bonds, indicating healthy demand for G-sec from the investor community. Primary Dealers, commonly referred to as PDs, are financial institutions authorised by the RBI to buy and sell government securities. The underwriting auction was conducted through multiple price-based methods on May 23 (Friday) between 09:00 A.M. and 09:30 A.M. Bids under the Additional Competitive Underwriting (ACU) auction were done electronically through the Core Banking Solution (E-Kuber) System. Earlier this year, on March 27, the government had notified the indicative calendar for the issuance of government-dated securities, including Sovereign Green Bonds (SGrBs), for the first half of the fiscal year 2025-26 (April 1, 2025, to September 30, 2025). The indicative calendar for such auctions is released beforehand in order to enable institutional and retail investors to plan their investments efficiently and to provide transparency and stability to the Government Securities market.
