Latest news with #Liquidity
Time of India
3 days ago
- Business
- Time of India
RBI MPC meet: Central bank cuts CRR by 1%; to unlock Rs 2.5 lakh crore to bank funds by December
NEW DELHI: The Reserve Bank of India (RBI) on Friday announced a 1% cut in the Cash Reserve Ratio (CRR), releasing Rs 2.5 lakh crore into the banking system, in a major move to boost liquidity aimed at supporting lending to productive sectors of the economy. Tired of too many ads? go ad free now The CRR reduction will be implemented in four equal phases and will bring the reserve requirement down to 3% by November 29, 2025. This allows banks to maintain a lower level of 3% liquid cash reserve with the RBI, providing them additional funds for lending activities. The last time the RBI made such a significant CRR cut was on March 27, 2020, when it slashed the ratio by 1% and the repo rate by 75 basis points in response to the Covid-19 crisis. "The Reserve Bank remains committed to provide sufficient liquidity to the banking system. To further provide durable liquidity, it has been decided to reduce the cash reserve ratio (CRR) by 100 basis points (bps) to 3% of net demand and time liabilities (NDTL) in a staggered manner during the course of the year," RBI Governor Sanjay Malhotra said. The implementation will occur in four 25 bps installments, beginning September 6, October 4, November 1 and November 29, 2025, Malhotra continued, while announcing the bi-monthly MPC outcome. "The cut in CRR would release primary liquidity of about Rs 2.5 lakh crore to the banking system by December 2025. Besides providing durable liquidity, it will reduce the cost of funding of the banks, thereby helping in monetary policy transmission to the credit market," he added. Enhanced credit availability will support economic growth, which decreased to a four-year low of 6.5% in FY'25. "I would like to reiterate that we will continue to monitor the evolving liquidity and financial market conditions and proactively take further measures, as warranted," he said. Tired of too many ads? go ad free now The previous CRR reduction of 50 basis points to 4% occurred in December 2024's MPC announcement, implemented in two 25 basis point instalments effective from December 14, 2024 and December 28, 2024. This action released Rs 1.16 lakh crore into the banking system, easing liquidity constraints. Earlier on May 4, 2022, RBI raised the Cash Reserve Ratio (CRR) from 4% to 4.5% during an unscheduled meeting of the Monetary Policy Committee (MPC), with the change taking effect from May 21 that year. However, the RBI kept the Statutory Liquidity Ratio (SLR) unchanged at 18%. Under the SLR rule, banks must hold 18% of their total deposits or net demand and time liabilities (NDTL) in government securities. This requirement helps ensure banks have enough liquidity to meet withdrawal demands and maintain financial stability.
Yahoo
22-05-2025
- Business
- Yahoo
Ellington Credit Co (FRA:73Z) Q1 2025 Earnings Call Highlights: Navigating Market Challenges ...
Net Loss: $0.23 per share for calendar Q1. Adjusted Distributable Earnings: $0.26 per share for calendar Q1. Net Interest Margin: Increased by 20 basis points to 5.27%. Book Value per Share: $6.08 as of March 31. Economic Return: Negative 3.2% for the quarter. Debt-to-Equity Ratio: Declined to 2.2 times at March 31 from 2.9 times at December 31. CLO Portfolio: Increased by 46% to $250 million at March 31. Agency RMBS Holdings: Decreased slightly to $504 million from $512 million at December 31. Net Asset Value per Share: Estimated range of $5.85 to $5.91 at the end of April. Cash and Unencumbered Assets: Totaled $169 million or 74% of total shareholders' equity as of March 31. Warning! GuruFocus has detected 6 Warning Signs with SNOW. Release Date: May 21, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Ellington Credit Co (FRA:73Z) successfully completed its conversion to a registered closed-end fund, enhancing liquidity and buying power. The company efficiently sold its remaining agency mortgage pools with minimal impact on net asset value, demonstrating effective risk management. Ellington Credit Co increased its CLO portfolio by 46% to $250 million, capitalizing on market opportunities. The company's adjusted distributable earnings covered dividends for the quarter, indicating strong financial management. Ellington Credit Co maintained high levels of liquidity, allowing for strategic deployment of capital in volatile markets. The company reported a net loss of $0.23 per share for calendar Q1, driven by declining prices on CLO mezzanine debt and equity. Economic return for the quarter was negative 3.2%, reflecting market challenges. CLO equity valuations were negatively impacted by loan coupon spread compression and price declines. The company's book value per share decreased to an estimated range of $5.85 to $5.91 by the end of April. Ellington Credit Co anticipates not covering the dividend in the calendar second quarter due to MBS sales and elevated cash prior to full redeployment. Q: How does the yield on the newly acquired $50 million of CLOs compare to the existing $250 million portfolio, and do you currently have dry powder to deploy? A: Gregory Borenstein, Portfolio Manager, explained that the yield on newly acquired CLOs varied, with some offering slightly wider yields and others potentially hundreds of basis points back. The portfolio's composition shifted based on investment thesis, with a balance between mezzanine and equity investments. Laurence Penn, CEO, confirmed that they still have dry powder and manage risk to allow for more asset deployment, with plans to increase credit hedges soon. Q: What are your perspectives on the asset management industry's push for 401(k) plans to access private equity, and its impact on the CLO market? A: Laurence Penn, CEO, noted that it might take time for this to impact the CLO asset class. Gregory Borenstein, Portfolio Manager, added that while increased demand could compress yields, it might also create attractive arbitrage opportunities for equity further down the line. Q: What does being fully deployed look like for your CLO investments, and were you more aggressive in deploying capital in early April? A: Gregory Borenstein, Portfolio Manager, stated that they were opportunistic in deploying capital as prices improved by the end of April. Laurence Penn, CEO, mentioned that they could easily exceed $300 million in CLO investments, depending on leverage and risk management strategies. Q: Can you share your latest thoughts on the adjusted distributable earnings (ADE) trajectory and dividend coverage? A: Laurence Penn, CEO, indicated that they might fall short of covering the dividend in the current quarter due to MBS sales and elevated cash levels but expect to resume coverage in the third quarter. Q: How do you manage liquidity and risk in the current market environment? A: Gregory Borenstein, Portfolio Manager, emphasized the importance of maintaining liquidity and using credit hedges to ensure the vehicle remains liquid during market shocks. Laurence Penn, CEO, added that they plan to issue unsecured debt later in the year to enhance risk management and asset deployment. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
20-05-2025
- Business
- Yahoo
Ripple Signs Two More Payment System Customers in UAE Expansion
Ripple said it signed on two new UAE-based customers, Zand Bank and Mamo, as it expands Ripple Payments, the firm's blockchain-based cross-border payments platform, in the region. The agreements follow Ripple securing a license from the Dubai Financial Services Authority (DFSA) in March, allowing it to manage global payments end-to-end for banks, fintechs and crypto firms. 'Securing our DFSA license enables Ripple to better serve the demand for solutions to the inefficiencies of traditional cross-border payments,' Reece Merrick, managing director for Middle East and Africa at Ripple, said in a Monday release. Zand Bank said the partnership aligns with its push toward digital finance. 'We are excited to soon launch an AED-backed stablecoin,' said Chirag Sampat, head of treasury and markets. Imad Gharazeddine, CEO and co-founder of Mamo, said using Ripple's services allows the company to offer 'faster and more reliable cross-border payments' for both businesses and consumers looking to scale their UAE operations. Ripple Payments currently operates in over 90 payout markets and has processed more than $70 billion in volume globally. The platform is available in Dubai, the U.S., Brazil, Mexico, Australia and Switzerland. Ripple uses a global network of payout partners and blockchain infrastructure to move money in minutes. In some cases, it also uses its native digital asset, XRP, as a bridge currency through its On-Demand Liquidity (ODL) service, allowing clients to instantly convert one fiat currency to another using the token. XRP prices are down 3.5% in the past 24 hours amid a broader market slump. The CoinDesk 20 Index has dropped 3.4%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
