Initially thought of sharing my review on the Wolf of Wall Street today, but I do not wanted to break the series of the EMIR regulations that we ended up yesterday choosing the Trade repositories (TR). Now we stand at the point from the Question no.4 of yesterday’s post.
a) Choose a 3rd Party Provider, following your decision to delegate
b) Decide which TR you will connect to, if you will self-report
c) Liaise with your counterparties to find out their requirements, if you will delegate reporting to them.
Question 4: What are the criteria to be taken into account before choosing my 3rd Party Providers?
The 3rd Party Provider should help you adapt to the new workflow for Trade Reporting as it will serve as the go-between with TRs. Continue reading
From the last Monetary policy RBI has started publishing Post Policy Conference Call with Researchers and Analysts providing transparency.
There are a lot of questions on the interest rates including MSF, LAF and OMOs.
You can read the full edited script on RBI Website
With reference to the above lets focus on The “term structure” of interest rates refers to the relationship between bonds of different terms. When interest rates of bonds are plotted against their terms, this is called the “yield curve”. Economists and investors believe that the shape of the yield curve reflects the market’s future expectation for interest rates and the conditions for monetary policy.
Usually, longer term interest rates are higher than shorter term interest rates. This is called a “normal yield curve” and is thought to reflect the higher “inflation-risk premium” that investors demand for longer term bonds. Continue reading
Good morning so the RBI New rates effective 29.10.2013 are :
*Reverse Repo Rate:6.75%
*Cash Reserve Ratio:4%
Well those are the rates where the governor Raghuram Rajan in his first “real” policy, increased the repo rate by 0.25% to 7.75% and cut the MSF rate by 0.25% to 8.75%. Reverse repo goes to 6.75%.
Well the above would be more clear providing you Continue reading
Inflation indexed bonds, a financial instrument which can act as a hedge against inflation by the RBI.,lets go in detail.
Before I describe their pros and cons Let us know what are they – They are the enhanced version of Capital Indexed bonds issued in 1997 by RBI. Capital indexed bonds provided inflation protection only for the principal while inflation indexed bonds provide inflation protection for interest payments as well. Theoretically, inflation indexed bonds could indicate the willingness of the government to maintain optimal Inflation numbers.
After the initial auction, inflation indexed bonds are traded in the secondary markets. A normal government security bond carries an inflation risk which the inflation indexed bonds are free from. So the difference between the rates of nominal rate of return from a normal government security bond would denote the inflation expectations of the market. Monetary policy makers can take cue from these market expectations to control the inflation rates. Continue reading
It was less than four weeks ago that the Reserve Bank of India, under new head Raghuram Rajan, stunned the world on September 20 when it announced that it would both hike its repo and cash reserve rates in an inflation fighting step, while lowering its marginal standing facility rate by 75 bps to 9.5% in order to boost banking sector liquidity, hence “bipolar policy” of the kind most recently seen in Europe. Moments ago, the RBI once again showed that when faced with the option of consumer pain, i.e. runaway inflation, and preserving a banking status quo, i.e. liquidity, the central bank will always choose the latter, when in a surprising move the RBI cut its Marginal Standing Facility rate by further 50 basis points, from 9.5% to 9.0%. Continue reading