In attempt to curb volatility in the Indian rupee prices, RBI increased the bank’s short term borrowing through MSF (Marginal standing facility) by 200 basis points, making it to 10.25% from 8.25% earlier. The RBI has also increased the bank rate by 200 basis points making it to 10.25%.It also limited the overall allocation of fund under the liquidity adjustment facility (LAF) to 1.0% of the net demand and time liabilities of the banking system which will equal to around Rs75,000 crore, applicable from July 17th. The RBI will also conduct open market operation (OMO) on Thursday(18th July,2013) by selling bonds of Rs. 12,000 crore which will further suck out liquidity from the market. EURUSD Further strength in the pair can be seen once the recent high of 1.3206 is revised anytime in the coming sessions, which could send pair even higher towards 1.3300 mark. Dollar Index We might see extension of the last week’s decline once prices trade sustainably below the recently made low of 82.4180 made on Thursday, towards the immediate support of 82.2410.
Posted on: Wed, 17 Jul 2013 08:59:13 +0000
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