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Time to Rescind FRBM and Stabilisation Policies

The fiscal constraints on providing any substantial stimulus are evident from the revised estimates of the budget for 2008-09. In such a situation and given the current economic environment, exhorting banks to provide an intensive stimulus makes sense provided the monetary policy and banking operations are not constrained by stabilisation goals. The government and the Reserve Bank of India therefore need to desist from persisting with the Fiscal Responsibility and Management Act-mandated environment insofar as borrowings from the central bank are concerned. The RBI also needs to take a deeper interest in the sectoral distribution of bank credit by monitoring, applying moral suasion and by providing an appropriate incentive structure.

MONEY MARKET REVIEW

Time to Rescind FRBM and Stabilisation Policies

EPW Research Foundation

assets ratio (CRAR) by all public sector banks, a further forced step-up in the ratio cannot be a priority in the current environment. But the government is bent on expanding the capital base of public sector banks whose CRARs are “between 10 and 12% and raise them to over 12%” ostensibly “to enable them to support the credit requirements of the productive sectors of the economy”. The World Bank conditionalities which would constrain the public sector banks from expanding credit for productive sectors constitute an issue in themselves. Incidentally, critical studies have shown that high levels of capital adequacy do not provide protection against bank failures.

1 Need for Greater RBI Involvement in Credit

The fiscal constraints on providing any substantial stimulus are evident from the revised budget numbers for the current year (Table 1). Despite the revenue and fiscal deficits shooting through the roof, the government has been able to provide for just Rs 39,570 crore (or 16.1%) of an increase under plan expenditure out of the total expenditure of Rs 2,46,811 crore (including bonds and securities issued to fertiliser and oil companies in lieu of their subsidies). The balance of 84% has all been absorbed essentially by major subsidies (Rs 1,51,757 crore), farmers’ debt redemp-

The fiscal constraints on providing any substantial stimulus are evident from the revised estimates of the budget for 2008-09. In such a situation and given the current economic environment, exhorting banks to provide an intensive stimulus makes sense provided the monetary policy and banking operations are not constrained by stabilisation goals. The government and the Reserve Bank of India therefore need to desist from persisting with the Fiscal Responsibility and Management Act-mandated environment insofar as borrowings from the central bank are concerned. The RBI also needs to take a deeper interest in the

T
he mainstream stabilisation path adopted under the Fiscal Responsibility and Budget Management (FRBM) Act regime has neither achieved fiscal consolidation nor created the necessary fiscal space for increasing, except to a limited extent, the expenditure stimulus badly needed to face the extraordinary circumstances into which the national economy has been pushed in the wake of the global economic crisis. This failure on the fiscal front has imposed an overwhelming burden of stimulus on monetary policy and the banking sector. If that area of policy is also made hostage to stabilisation policies, as has happened in the recent past, the required stimulus will only be a pipe dream.

Genuine misgivings on this count arise from the fact that the government is reportedly negotiating a World Bank loan for financial assistance of about $3 billion for the recapitalisation of 15 public sector banks over the next two years. Having already attained a 10% capital to risk-weighted

Table 1: Excess of Revised Expenditure Over the Budget: 2008-09 (Rs crore)

sectoral distribution of bank credit by monitoring, applying moral suasion and by providing an appropriate incentive structure.

BE RE Excess

Total expenditure 7,50,884 9,00,953 1,50,069 (2,46,811)

Plan expenditure 2,43,386 2,82,956 39,570

Non-plan expenditure 5,07,498 6,17,996 1,10,498 (2,07,240)

Major subsidies 66,537 1,22,352 55,015 (2,18,294) (1,51,757)

Food 32,667 43,627 10,960

tion (Rs 15,000 crore) and the burden of implementing the Sixth Pay Commission salary increases (Rs 40,000 crore) even beyond the commission’s recommendations. The total burden on the debt relief account would amount to Rs 65,300 crore and the extra budgetary outgo on account

Fertilisers 30,986 75,849 44,863 of the Pay Commission in the aggregate (95,849) (64,863)

would be approximately Rs 77,000 crore

Petroleum 2,884 2,876 -8 (78,818) (75,934) (including defence and pensions).

The review has been drafted by Piyusha D Hukeri, while the supporting tables and graphs have been jointly compiled by V P Prasanth, Rema K Nair and Anita B Shetty.

Economic & Political Weekly

EPW
february 28, 2009

Memo items:
Revenue deficit 55,184 2,41,273 1,86,089
Fiscal deficit [1.0] 1,33,287 [4.4] (3,37,215) [6.2] 3,26,515 (2,82,031) 1,93,229
[2.5] [6.0] (4,22,457) [7.8] (2,89,170)
  • (I) Figures within round brackets take into account bonds issued to oil (Rs 76,742 crore) and fertiliser (Rs 20,000) companies.
  • (ii) Figures within square brackets represents percentages to GDP at market prices. Source: Budget Documents 2009-10.
  • vol XLIV No 9

    The expansionary impulse thus arising from the Rs 40,000 crore or so increase in plan expenditure would be very meagre indeed. Exhorting banks to provide more of an intensive stimulus in such a situation makes sense provided the monetary policy and banking operations are not constrained too overtly by stabilisation goals, which have proved to be antithetical to the role of bank credit in development. In the

    MONEY MARKET REVIEW

    27/12 30/12 2/1 5/1 8/1 11/1 14/1 17/1 20/1 23/1 26/1 29/1 Call Rates Repo Rates – Outside the RBI Call Money Volume (Rs ‘000 Crore) (Right axis)

    5–

    4–

    3–

    2–

    1–

    0

    current financial scene, these constraints appear real. There are two factors which stand out in this respect, which can be resolved only if the government and the Reserve Bank of India (RBI) desist from persisting with the FRBM mandated environment insofar as borrowings from the central bank are concerned and also with the avoidance of RBI’s sector-specific refinance and rediscount facilities, so as to stimulate larger bank credit for productive sectors with a redistributive goal.

    The involvement of RBI credit, both for government and the commercial sector, becomes imperative in the current scenario because of two reasons. First, under no circumstances should the interest rates be allowed to rise from the present levels. There is in fact a case for sharply reducing the rates for productive sector borrowings, for the current sluggishness particularly in industrial investment and production activities in no small measure is attributable to the high interest cost inflicted on the system by the RBI for fighting inflation from early 2008. Second, the assumption that the release of liquidity into the money

    Table 2: Money Market Operations (RBI's Daily Data)

    said to be worth Rs 4,28,000

    – 18

    crore since September

    – 16

    2008), would result in any

    – 14

    substantial increases in

    – 12

    credit for productive sec

    – 10

    tors, let alone for informal

    –8

    sectors, has been dis

    –6

    proved. The situation calls

    –4

    for not only larger credit

    –2

    but also its better distri

    –0

    bution in favour of the

    informal sectors which absorb the largest chunk of the labour force and which are crying for higher institutional credit support in this depressed environment. Only with a c alibrated intervention by the RBI with packages of incentives and disincentives can the banks be goaded to achieve these credit objectives.

    With the galloping fiscal deficit and the consequent step-up in market borrowing targets of Rs 3,19,472 crore in the 2008-09 revised budget and Rs 3,08,675 crore in the next year’s budget estimates, both roughly three times the borrowings in 2007-08, large pressures on interest rates can only be expected. Also, such huge market borrowings would have a serious crowding out effect on bank lending to the private sector. Both the issues of rising yield rates on government securities and the strain on liquidity for commercial credit could be resolved if the authorities agree to rescind the FRBM mandated rule which prohibits government borrowing from RBI under normal circumstances. It is only by allowing the RBI to subscribe to the primary issues of government loans that their limits desired and set; such an action would also facilitate the provision of longterm liquidity into the market unlike the present system of injecting short-term liquidity through the liquidity adjustment facility (LAF), which does not allow banks to plan for commercial credit disbursals.

    There is the case of similar involvement of the RBI in providing refinancing and rediscount facilities for banks for onlending to the preferred sectors. Along with the policy guidelines on lending to agriculture, small, medium and micro enterprises and other small borrowers, which the banks do not seem to be observing, it is necessary for the RBI to take a deeper interest in such sectoral distribution of credit by monitoring, by applying moral suasion, and also by providing an appropriate incentive structure. An age-old and well-proven method is to provide refinance facilities for specified sectoral loans at a moderate rate of interest (say, at the bank rate or at (+) or (-) the bank rate). When a policy rate is thus applied to the primary borrowings of banks, the interest rate so applied becomes a potent instrument of policy, unlike the present situation in which the repo/ reverse rates are used as instruments for day to day money market operations, while the bank rate hardly has any relevance for the banks’ lending operations

    In the RBI’s involvement in such lendings to the government or to commercial sectors, the issue of injecting primary liquidity should hardly be a matter of concern, particularly in the current year when the growth of foreign currency assets has almost stopped and the level of “reserve

    January 2009

    December 2008

    Average

    Average Items for Five 30(RF) 23 16(RF) 9 2(RF) for Four 26 19(RF) 12 5(RF) Weeks Weeks

    No of working days 27 5 5 6 5 6 22 5 6 5 6

    Call Money

    Weighted average of call rates: 2.32-5.63 2.32-4.17 2.62-4.65 3.75-4.35 2.50-4.63 5.02-5.63 5.26-6.56 5.65-6.55 5.63-6.56 5.26-6.10 5.52-6.21 % (weekly range) per annum (2.86) (4.35) (5.02) (6.36) (5.52)

    Daily averages (Rupees crore) 8,475 7,528 9,521 10,358 7,368 7,516 9,755 8,196 10,882 11,208 8,714 Total call market borrowings (1,572) (536) (408) (105) (67)

    Notice Money

    Weighted average of notice money rates: 3.20-6.00 3.20-4.38 3.40-4.45 4.25-4.42 3.58-4.44 4.94-6.00 4.80-6.54 5.19-6.17 5.26-6.54 4.80-5.63 5.20-6.10 % (weekly range) per annum (4.19) (4.42) (5.08) (6.54) (6.10)

    Daily averages (Rupees crore) 2,353 2,784 2,337 2,263 3,145 1,442 2,269 2,595 1,806 3,466 1,461 Total notice market borrowings (13,888) (13,574) (7,900) (10,829) (8,760)

    Turnover in Term Money Market 2,66 201 343 193 263 321 197 235 229 80 232 (borrowings) $$ (370) (155) (10) (75) (104)

    * Data for reporting Fridays are given within brackets and they are also included in the weekly range/daily averages. $$ No of reporting/traded days are fewer than given above.

    february 28, 2009 vol XLIV No 9

    MONEY MARKET REVIEW

    money” has experienced an absolute fall as the government sought to expand its of about Rs 43,000 crore (or by 4.6%) in market borrowing programme against the first 10 months of the current fiscal the backdrop of mounting concerns about year. That the system had absorbed an the weakening macroeconomic fundaexpansion of Rs 2,19,427 crore or by 30.9% mentals envisaging higher expenditure. in reserve money during all of 2007-08, The month began with the government suggests the extent to which there exists unveiling its second stimulus package scope to inject primary money into the with the objective of reducing credit costs system in a normal year. It should be clari-and relaxing various constraints imposed fied at once that the traditional relation-on external borrowings in the earlier ship between money and reserve money phase. In addition, the repo and reverse (i e, money multiplier) has collapsed in repo rates were reduced by another 100 the Indian context as well as in the experi-basis points (bps) each to 5.5% and 4%, ences of central banks the world over and respectively, and the cash reserve ratio that there exists scope for the calibration of (CRR) was reduced by 50 basis points to RBI’s primary money injection policy 5% with effect from 17 January 2009. depending on the evolving macroeco-With these latest reductions, the repo nomic situation relating to output trends, rate eased by 350 bps, reverse repo by money growth and inflation. 200 bps, and CRR by 400 bps since Octo

    ber 2008. As a result, the liquidity situa2 Money, Gilt-Edged tion remained in surplus, which reflected and Forex Markets itself through a sharp easing of short-term In January 2009, the outlook for the gilt-money market rates, large size of reverse edged securities market shifted from being repo absorptions and declines in yield buoyant to exhibiting heightened caution rates on gilts across maturities.

    The market senti-

    Table 3: Weighted Averages of Daily Call/Notice Rates in Per Cent Per Annum: Simple Statistical Characteristics ments turned cau

    Month/Week Simple Standard Coefficient of Simple Standard Coefficient of

    tious as the govern-

    Mean* Deviation Variation Mean* Deviation Variation (in %)$ (in %)$ ment superseded its

    Call Money Notice Money**

    earlier indicative sch-

    December 2008

    edule of borrowings

    All four weeks 5.99 0.44 7.32 4.00 2.54 63.39

    with a new expan

  • 26 6.18 0.34 5.54 4.49 2.54 56.58
  • 19 (RF)* 6.29 0.35 5.63 4.70 2.35 49.99ded schedule, thus
  • 12 5.49 0.35 6.39 4.18 2.36 56.35mobilising Rs 35,000
  • 5 (RF)* 5.95 0.31 5.28 2.75 3.03 110.18 crore through dated January 2009

    securities in January

    All five weeks 4.25 0.85 19.93 3.34 2.07 62.05

    alone as against

    30 (RF)* 3.49 0.91 26.08 2.35 2.20 93.25

    Rs 20,000 crore

    23 4.09 0.75 18.28 4.04 0.40 9.96 16 (RF)* 4.17 0.21 5.10 1.45 2.24 154.96

    planned earlier. Fur

    9 4.04 0.88 21.77 3.21 1.83 56.91ther, the RBI jetti

    2 (RF)* 5.29 0.20 3.74 5.47 0.42 7.67 soned the earlier

    ** Separate reportings began on 15 March 2005. * Including data for reporting Fridays (RF).

    practice of unwind

    $ Based on original unrounded figures. Source: RBI. ing MSS bonds prior

    Table 4: Comparison of Call, Overnight CBLO and Repo Rates to the dated securi-

    Week Ending Weighted Average Rates (in %)

    Daily Average Repo (Rs crore)

    ty auctions, thereby

    Call Overnight Repo Call Overnight Repo

    CBLO CBLO ensuring sustaining

    December 2008of liquidity; it also 5-Dec-08 6.14 5.08 5.96 10,176 29,074 20,718

    resorted to a rejec

    12-Dec-08 5.37 4.70 5.16 14,674 30,932 18,662

    tion of a MSS bond

    19-Dec-08 6.43 5.13 5.90 12,688 33,129 14,344

    repurchase, all of

    26-Dec-08 6.14 5.23 5.84 10,792 36,007 14,060

    January 2009which helped to 2-Jan-09 5.33 4.38 5.11 8,958 28,287 14,744

    introduce caution.

    9-Jan-09 4.34 3.90 4.26 10,513 34,730 16,819

    Further, there has

    16-Jan-09 4.27 3.76 4.24 12,620 33,021 19,060

    been, after a long

    23-Jan-09 4.32 3.89 4.28 11,857 32,541 19,229

    period, an instance

    30-Jan-09 4.16 3.48 4.10 10,003 30,659 19,702 Source: The Clearing Corporation of India Ltd (CCIL). of two securities

    Economic & Political Weekly february 28, 2009 vol XLIV No 9

    EPW

    devolving partly on the primary dealers in their auctions. In addition, the government increased the notified amount under 91-day treasury bills (TBs) from the usual Rs 1,500 to Rs 8,000 crore per week. F urther, the state government increased their market borrowings and mobilised Rs 18,498 crore during the month.

    In response to these developments, the yields, which touched a multi-year low towards the beginning of the month, saw a jump in the later half. Even the expectations of a further easing of rates in the impending third quarter review of monetary policy were mixed as a finance ministry official expressed the hope that the central bank would hold the rates steady and eventually RBI held the rates steady. However, the RBI extended the various liquidity augmenting measures till September 2009 given the prevailing uncertainties among other measures. But, with the further reduction in fuel prices, the sentiments were buoyed up as they expected the inflation rate to ease further. Besides, there were instances of crowding out of private borrowings even as some corporate borrowers preferred to wait and watch as an uncertainty prevailed around the bank lending rates. Also, the unfolding of the misgovernance at Satyam continued to adversely affect the rupee-dollar exchange rate.

    2.1 Call Money Market

    The huge surfeit of liquidity manifested itself through the weighted average call rate ruling around the new reverse repo rate set on 3 January despite such huge outflows on account of auctions (Table 2, p 24). Yet, the standard deviation, a measure of volatility, rose to 0.81 from 0.44 in December 2008 as the rates dipped to a low of 2.50% during the month (Graph A, p 24) (Table 3).

    The month began with the weighted average call rate easing from 5.25% on 1 January to 5.02% on 2 January, the first reporting Friday of the month, as the banks had covered their positions. Following the reduction in repo and reverse repo rates by the RBI, the overnight rates realigned themselves with the new informal corridor to rule at 4.63% on 5 January and fell further to 4.23% on 7 January. The call rate dipped to a low of 2.5% on 9 January

    MONEY MARKET REVIEW

    49 47 45 43 41 39

    (Daily)
    Working
    (Monthly Averages) Days Jan 2009
    (Jan 2001 to Dec 2008)

    following subdued demand for funds in a holiday-shortened week; they were impervious of the dated securities auctions held on the same day. Following the auction related outflows, the overnight rate ruled in a range of 3.75-4.26% until 15 January and rose marginally to 4.35 % on the second reporting Friday, i e, 16 January. The call rates ruled around the reverse repo rate for the rest of the month and touched a low of 2.32% on the third reporting Friday (30 January) as the liquidity situation remained in surplus.

    Interest rates in the collateralised segments of money market, the market repo and the Collateralised Borrowing and Lending Obligation (CBLO) moved in tandem with, but remained below, the uncollateralised call rates in January (Table 4, p 25).

    2.2 Forex Market

    The rupee-dollar exchange rate, in January, depreciated due to the strengthening of US dollar, demand for dollars from oil companies, widening current account deficit and weaknesses in domestic stock million while the forex reserves witnessed outflows to the extent of $6,976 million in the month. The dollar generally appreciated against most of the currencies as the US investors were liquidating their positions in overseas equity and bond markets and repatriating money back to the US. Further, the relaxation of the limits imposed on external borrowings in the second stimulus package supported the sentiments, but given the frozen international credit markets, the impact remained limited.

    The daily average turnover in currency futures crossed Rs 2,000 crore with the aggregate turnover of all three exchanges 2009 as against Rs 45,802 crore in December 2008. In January 2009, the trading near month contract accounted for over 75% on National Stock Exchange (NSE) as well as MCX-SX.

    Given the depreciating movement of the spot rupee-dollar exchange rate as well as the narrowing interest rate differential, the forward premia for the threemonth and six-month tenures exhibited range bound movements. Also, the arbitrage between off-shore and on-shore market remained subdued as the offshore market expected depreciation of the rupee (Graph C, p 27).

    Table 6: Auctions of 91-Day Treasury Bills (Amount in Rs crore)

    Date of Notified Bids Tendered Bids Accepted Subscription Cut-off Cut-off Amount Auction Amount Devolved Price Yield Outstanding No Face Value No Face Value on PDs (Rs) Rate on the Date (Amount) (Amount) (Amount) (%) of Issue

    (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

    2008 January 2 500.00 70 3,411.05 6 500.00 0.00 98.28 7.02 38,498.00

    (1) (1,000.00) (1) (1,000.00) [98.28] [7.02]

    January 9 3,500.00 76 6,274.10 39 3,500.00 0.00 98.28 7.02 40,798.00

    (1) (3,500.00) (1) (3,500.00) [98.30] [6.94]

    January 16 3,500.00 74 3,674.40 63 3,000.00 0.00 98.26 7.10 39,398.00

    (1) (200.00) (1) (200.00) [98.28] [7.02]

    January 23 3,500.00 (58) (2,974.00) (51) (2,589.00) (0.00) 98.24 7.19 41,387.00

    (3) (3,000.00) (3) (3,000.00) [98.28] [7.02]

    January 30 2,000.00 48 1,616.58 24 500.00 0.00 98.22 7.27 41,890.00

    (2) (883.32) (2) (883.32) [98.23] [7.23]

    2009 January 07 8,000.00 194 23,148.72 21 8,000.00 0.00 98.84 4.71 71,846.00

    (0) (0.00) (0) (0.00) [98.87] [4.58]

    January 14 8,000.00 155 18,212.00 72 8,000.00 0.00 98.87 4.58 69,368.00

    (1) (1.00) (1) (1.00) [98.89] [4.50]

    January 21 8,000.00 142 18,886.80 65 8,000.00 0.00 98.85 4.67 74,848.00

    (1) (0.30) (1) (0.30) [98.87] [4.58]

    markets as well as the unravelling of a January 28 8,000.00 152 13,498.65 106 8,000.00 0.00 98.82 4.79 76,448.00

    (1) (0.50) (1) (0.50) [98.84] [4.71]

    corporate fraud impinging adversely on

    Figures in parentheses in cols 3 to 6 represent numbers and amounts of non-competitive bids which are not included in the total. the markets. Further, the FIIs turned net Figures in the square brackets under cols 8 and 9 represent weighted average price and respective yield.

    Table 5: Details of Central Government Market Borrowing (Amount in Rs crore)

    Date of Auction Nomenclature of Loan Type of Notified Competitive Bids Received Competitive Bids Accepted Indicative YTM Devolvement on Earlier Earlier Date Auction Amount at Cut-off Price Primary Dealers Yields Set of Auction

    02-Jan-09 7.46% 2017 Normal 6,000 275 16,751 128 5,974 5.73% (Rs 111.65) NIL 7.38 09-Jan-06

    02-Jan-09 7.40% 2035 Normal 4,000 201 7,716 130 398 6.53% (Rs 110.92) NIL 7.77 07-Feb-06

    09-Jan-09 7.59% 2016 Normal 7,000 231 12,826 170 6,991 6.70% (Rs 105.03) NIL 7.96 08-May-08

    09-Jan-09 6.30% 2023 Normal 4,000 107 5,911 72 3,305 7.35% (Rs 90.81) 690.5 6.35 03-May-03

    09-Jan-09 7.50% 2034 Normal 4,000 168 4,884 143 3,562 7.60% (Rs 98.87) 425.5 6.99 12-Dec-08

    16-Jan-09 7.56% 2014 Normal 4,000 201 9,101 95 3,996 5.50% (Rs 110.08) NIL 7.56 14-Nov-08

    16-Jan-09 30 years 2039 Normal 3,000 315 11,810 76 2,978 6.83% NIL -

    16-Jan-09 8.24% 2018 Normal 3,000 211 6,888 104 2,987 5.45% (Rs 120.10) NIL 7.73 07-Nov-08

    30-Jan-09 7.56% 2014 Normal 3,000 180 8,896 52 2,990 6.02% (Rs 107.40) NIL 5.50 16-Jan-09

    30-Jan-09 6.83% 2039 Normal 3,000 165 6,742 140 3,000 7.35% (Rs 93.75) NIL 6.83 16-Jan-09

    30-Jan-09 10 years 2019 Normal 4,000 434 18,020 143 3,988 6.05% NIL -

    01-Jan-09 7.55% 2010 MSS 5,000 35 4,645 14 3,580 4.60% (Rs 103.83) NIL -

    01-Jan-09 5.87% 2010 MSS 5,000 41 3,450 NIL NIL NIL NIL -

    15-Jan-09 6.57% 2011 MSS 3,000 85 3,503 71 3,000 4.29% (Rs 104.52) NIL -

    29-Jan-09 7.55% 2010 MSS 3,000 94 6,883 48 3,000 4.29% (Rs 104.02) NIL -

    Source: RBI Press Releases.

    february 28, 2009 vol XLIV No 9

    MONEY MARKET REVIEW

    Graph C: Annualised Forward Premia in Percentage for the US Dollar in the Domestic raised Rs 35,000 crore Inter-Bank Market and Weighted Averages of Call Rates for January 2009

    through three instances

    Weighted Averages of Call Rates (Right axis) 1-month 6-month

    7– 6– 5– 4– 3– 2– 1–

    –0

    29/12 1/01 4/01 7/01 10/01 13/01 16/01 19/01

    3 Primary Markets

    There was a distinct firmness in yields offered in the primary gilt-edged market.

    3.1 Dated Securities

    In superseding the indicative calendar issued on 5 December 2008, the government issued another calendar on 6 January 2009 for raising an additional Rs 70,000 crore over and above the budgeted amount during the period between 1 December 2008 and 31 March 2009, which is warranted by the additional expenditure of the government. Thus, as referred to above, as against the earlier scheduled Rs 20,000 crore worth of borrowings, the government

    –6

    in January.

    – 5 The huge borrowing programme sailed

    –4

    through smoothly

    – 3 with only two issues for Rs 1,116 crore

    –2

    devolving on primary

    – 1 dealers. The yield rates initially exhibited a

    falling trend as com

    22/01 25/01 28/01

    pared to their earlier issuance; however, later there was a distinct firmness in the yields offered. For instance, the new 30-year paper was issued at 6.83% on 16 January but on its re-issuance on 30 January, the yield set jumped up to 7.35% (Table 5, p 26).

    The MSS unwinding was only to the extent of Rs 11,000 crore in January 2009 compared to Rs 29,000 crore in November 2008 wherein the RBI preceded the MSS auctions to the normal dated securities auction.

    3.2 Treasury Bills

    Responding to the easing of short-term money market rates as well as benchmark rates, the weighted average yields on TBs

    Table 7: Auctions of 182-Day Treasury Bills (Amount in Rs crore)
    Date of Notified Bids Tendered Bids Accepted Subscription Cut-off Cut-off Amount
    Auction Amount Devolved Price Yield Outstanding
    No Face Value No Face Value on PDs (Rupees) Rate on the Date
    (Amount) (Amount) (Amount) (%) of Issue
    2008
    January 9 1,500.00 62 3,102.00 29 1,500.00 0.00 96.52 7.23 22,880.00
    (0) (0.00) (0) (0.00) [96.55] [7.17]

    January 23 2,500.00 60 2,855.00 41 2,105.00 0.00 96.51 7.25 22,585.00

    (0) (0.00) (0) (0.00) [96.54] [7.19]

    January 7 1,500.00 90 5,331.00 6 1,500.00 0.00 97.74 4.64 22,175.00

    (0) (0.00) (0) (0.00) [97.76] [4.60]

    declined across maturities; yet, the yield curve remained inverted with yields on 91-day TBs exceeding those on 182-day and 364-day TBs. The spread between 91-day TB and 364-day TBs which narrowed from (-) 21 bps in October 2008 to (-) 1 bp in December 2008 again widened to (-) 14 bps in January 2009 (Table 6, p 26 and Tables 7 and 8). Also in sync with secondary market gilt-edged yields, the yield set on 364-day TB rose in the month from 4.51% set in the auction held on 14 January to 4.59% on 30 January.

    3.3 Corporate Bonds Market

    With the government being the major borrower given its needs to finance the additional expenditure, there was to some extent a “crowding out” of corporate debt issues as reflected in the somewhat lower borrowings at Rs 10,275 crore in January 2009 as compared with Rs 18,938 crore in December 2008. Moreover, the banks had raised Rs 11,863 crore in December 2008 in contrast to only Rs 1,350 crore in January 2009. As part of the stimulus package, the India Infrastructure Finance Corporation Ltd (IIFCL) mobilised Rs 2,500 crore with a greenshoe option of Rs 4,869 crore, thus raising an aggregate amount of Rs 7,369 crore (Table 9, p 29).

    The Securities and Exchange Board of India (SEBI) advised the Sardar Sarovar Nigam Ltd (SSNL) to disclose the formula for calculating the price for the premature redemption of its bonds in January 2009, the bonds were issued in September 1993 without any call option then, but the option

    January 21 1,500.00 74 4,321.00 23 1,500.00 0.00 97.78 4.55 22,175.00 was inserted later through an act that led

    (0) (0.00) (0) (0.00) [97.80] [4.51]

    to a spate of investor compliants.

    Figures in the square brackets represent weighted average price and the respective yield. Figures in brackets represent numbers and amounts of non-competitive bids which are not included in the total.

    4 Secondary Market

    Table 8: Auctions of 364-Day Treasury Bills (Amount in Rs crore)

    Date of Notified Bids Tendered Bids Accepted Subscription Cut-off Cut-off Amount Despite the huge surfeit of liquidity, the Auction Amount Devolved Price Yield Outstanding No Face Value No Face Value on PDs (Rupees) Rate on the Date weekly average secondary market turnover (Amount) (Amount) (Amount) (%) of Issue

    in gilt-edged securities declined to a range

    2008 January 2 1,000.00 98 6,415.00 8 100.00 0.00 93.14 7.39 58,034 of Rs 42,983 crore to Rs 86,395 crore in

    (0) (0.00) (0) (0.00) [93.16] [7.36]January 2009 as against a range of January 16 3,000.00 (116) (6,897.00) (57) (3,000.00) (0.00) 93.14 7.39 59,596.00

    Rs 55,771 crore to Rs 1,05,967 crore in

    (2) (118.75) (2) (118.75) [93.16] [7.36] January 30 2,000.00 75 3,185.00 42 2,000.00 0.00 93.05 7.49 60,346 December 2008 due to heightened uncer

    (0) (0.00) (0) (0.00) [93.09] [7.44] tainty regarding the impact of the huge 2009borrowing programme.

    January 14 1,000.00 69 4,235.00 19 1,000.00 0.00 95.70 4.51 49,930

    (0) (0.00) (0) (0.00) [95.74] [4.46]Following the announcement of the

    January 28 1,000.00 68 2,850.50 29 1,000.00 0.00 95.62 4.59 48,944 new calendar of issuances, the yield on

    (1) (13.50) (1) (13.50) [95.65] [4.56]

    10-year benchmark paper jumped from

    Figures in the square brackets represent weighted average price and the respective yield. Figures in brackets represent numbers and amounts of non-competitive bids which are not included in the total. 5.79% in the week ending 2 January to

    Economic & Political Weekly february 28, 2009 vol XLIV No 9

    EPW

    MONEY MARKET REVIEW

    Appendix Table: Secondary Market Operations in Government Papers: NDS and NDS-OM Deals (Amount in rupees crore)
    Descriptions Week Ending January 2009: Yield to Maturity on Actual Trading Total for the Month
    30 23 16 9 2 of January 2009
    AMT YTM CY AMT YTM CY AMT YTM CY AMT YTM CY AMT YTM CY AMT YTM CY
    1 Treasury Bills
    A 91-Day Bills 3186.29 4.62 2894.56 4.53 5181.12 4.51 2235.74 4.59 1938.54 4.72 15436.25 4.57
    B 182-Day Bills 50.00 4.52 840.17 4.55 268.90 4.57 274.10 4.32 317.02 4.99 1750.19 4.60
    C 364-Day Bills 609.56 4.57 1709.05 4.47 1417.67 4.45 1279.83 4.50 1336.69 4.57 6352.80 4.50
    2 GOI Dated Securities
    A Regular (Per Cent: Year)
    5.48 , 2009 106.88 4.83 5.47 366.15 4.79 5.47 1721.72 4.56 5.46 535.00 4.49 5.46 264.25 5.01 5.47 2994.00 4.63 5.46
    6.65 , 2009 334.49 4.93 6.63 1387.10 4.72 6.63 151.49 4.51 6.62 254.94 4.45 6.62 449.00 4.86 6.62 2577.02 4.73 6.62
    7.33 , 2009 OMC SB - - - 31.30 4.96 7.31 30.00 5.08 7.31 150.00 6.16 7.32 - - - 211.30 5.83 7.31
    11.50 , 2009 0.03 4.80 11.29 - - - 0.03 9.47 11.43 - - - 152.03 5.55 11.26 152.09 5.55 11.26
    11.99 , 2009 - - - - - - - - - 505.80 4.95 11.79 5.00 5.55 11.79 510.80 4.96 11.79
    5.87 , 2010 145.00 4.68 5.81 450.00 4.59 5.80 490.00 4.52 5.80 575.00 4.47 5.79 1301.00 5.13 5.83 2961.00 4.80 5.81
    6.20 , 2010 UTI SB - - - 85.00 5.89 6.18 - - - 545.00 6.08 6.19 135.00 6.50 6.22 765.00 6.13 6.20
    7.50 , 2010 - - - 130.00 4.60 7.24 - - - 45.76 4.84 7.25 - - - 175.76 4.66 7.24
    7.55 , 2010 275.00 4.44 7.27 25.00 4.60 7.28 0.50 4.83 7.30 - - - 45.00 4.93 7.30 345.50 4.52 7.28
    11.30 , 2010 225.10 4.68 10.32 165.00 4.74 10.32 945.00 4.83 10.32 865.25 4.89 10.32 101.00 5.32 10.38 2301.35 4.85 10.32
    11.50 , 2010 - - - 296.08 4.58 10.53 - - - 4.80 5.15 10.59 380.00 5.67 10.65 680.88 5.19 10.60
    12.25 , 2010 - - - 5.00 4.97 11.14 120.00 4.81 11.10 284.65 4.98 11.11 260.00 5.67 11.20 669.65 5.22 11.14
    6.57 , 2011 - - - 200.00 4.54 6.32 205.00 4.61 6.32 245.00 4.96 6.37 105.00 5.11 6.38 755.00 4.77 6.34
    9.39 , 2011 320.78 5.21 8.58 944.00 5.10 8.56 707.00 4.94 8.52 352.00 5.10 8.55 355.75 5.37 8.59 2679.53 5.11 8.55
    11.50 , 2011 - - - 40.80 5.19 9.88 76.20 5.05 9.98 100.00 5.40 9.91 25.00 5.62 9.96 242.00 5.28 9.93
    12.00 , 2011 - - - 145.00 5.22 10.25 - - - 100.00 5.54 10.31 - - - 245.00 5.35 10.27
    6.85 , 2012 1.00 5.84 6.66 - - - 50.00 5.38 6.57 80.00 5.66 6.62 - - - 131.00 5.55 6.60
    7.47 , 2012 OIL MKT BONDS - - - 90.00 6.49 7.27 150.00 6.50 7.27 - - - 10.00 7.00 7.37 250.00 6.52 7.28
    7.47 , 2012 OMC SB - - - 45.00 6.49 7.27 50.00 6.50 7.27 - - - - - - 95.00 6.50 7.27
    11.03 , 2012 1800.00 5.60 9.44 0.05 5.26 9.33 0.12 7.42 9.94 125.20 5.34 9.34 30.00 6.07 9.54 1955.37 5.59 9.43
    7.27 , 2013 1138.20 6.10 6.91 1221.20 5.74 6.85 1112.55 5.64 6.82 515.80 5.39 6.75 1135.70 5.54 6.79 5123.45 5.72 6.84
    8.27 , 2013 - - - - - - - - - - - - 225.00 5.34 7.67 225.00 5.34 7.67
    12.40 , 2013 - - - 30.00 6.25 9.99 385.00 6.01 9.89 - - - - - - 415.00 6.03 9.90
    7.37 , 2014 - - - 1026.30 6.33 7.05 561.00 5.90 6.92 396.08 5.98 6.94 316.50 5.63 6.83 2299.88 6.07 6.97
    7.56 , 2014 10320.50 5.95 7.02 7372.06 5.84 6.98 11402.07 5.71 6.92 7330.00 5.43 6.84 9503.80 5.44 6.84 45928.43 5.68 6.92
    7.38 , 2015 1.58 6.24 6.96 141.28 6.25 6.96 145.00 5.96 6.85 320.00 5.65 6.74 365.50 5.52 6.69 973.36 5.74 6.77
    7.59 , 2016 230.28 6.38 7.10 1183.65 6.20 7.03 3331.38 6.26 7.05 354.83 6.64 7.20 98.00 5.65 6.81 5198.14 6.26 7.05
    7.46 , 2017 284.79 6.37 6.97 105.50 6.21 6.89 406.70 6.15 6.87 2488.89 5.76 6.69 490.25 5.68 6.66 3776.13 5.85 6.73
    7.49 , 2017 70.30 6.46 7.04 39.18 6.28 6.96 47.40 6.17 6.91 213.08 6.02 6.84 579.53 5.84 6.76 949.49 5.96 6.82
    7.99 , 2017 175.45 6.40 7.25 600.20 6.21 7.16 1328.50 6.18 7.15 1143.00 6.25 7.17 1796.80 5.75 6.95 5043.95 6.06 7.09
    8.07 , 2017 41.16 6.41 7.32 237.10 6.20 7.23 - - - 345.89 6.17 7.21 1089.65 5.85 7.07 1713.80 5.98 7.13
    6.25 , 2018 8.14 6.34 6.29 6.00 6.04 6.16 27.64 5.98 6.13 71.89 5.78 6.05 114.04 5.83 6.07 227.71 5.86 6.08
    8.24 , 2018 18316.21 6.00 7.12 35613.57 5.71 6.98 45817.46 5.62 6.94 30916.25 5.51 6.88 29083.90 5.36 6.82 159747.39 5.62 6.94
    5.64 , 2019 - - - 4.00 6.17 5.87 13.00 6.02 5.80 2.25 6.25 5.91 145.70 5.85 5.73 164.95 5.88 5.74
    6.05 , 2019 851.82 6.00 6.03 14.60 6.16 6.12 15.20 6.27 6.15 32.54 6.11 6.07 33.37 5.79 5.93 947.53 6.01 6.03
    7.94 , 2021 - - - - - - - - - 864.00 5.64 6.60 3327.40 5.57 6.56 4191.40 5.59 6.57
    7.94 , 2021 - - - 450.00 6.15 6.88 2367.43 6.14 6.88 - - - - - - 2817.43 6.14 6.88
    10.25 , 2021 0.32 7.08 8.14 154.50 6.77 7.96 28.00 6.50 7.79 26.41 6.27 7.65 25.00 6.34 7.69 234.23 6.64 7.88
    7.00 , 2022 FERT BONDS - - 85.00 7.56 7.35 275.00 7.38 7.24 480.00 7.04 7.03 - 840.00 7.21 7.13
    7.00 , 2022 FERT SB - - - - - - - - - 15.00 7.47 7.29 115.00 7.01 7.01 130.00 7.06 7.04
    8.15 , 2022 FCI SB 21.18 7.67 7.83 19.86 7.43 7.68 38.27 7.47 7.69 359.17 7.11 7.48 21.72 7.11 7.47 460.20 7.18 7.52
    8.20 , 2022 134.25 6.86 7.36 85.00 6.72 7.28 160.00 6.68 7.25 35.00 6.49 7.13 61.00 6.12 6.92 475.25 6.65 7.23
    8.35 , 2022 150.00 6.86 7.40 110.00 6.77 7.34 280.02 6.71 7.31 136.00 5.82 6.77 226.00 6.04 6.90 902.02 6.44 7.14
    6.30 , 2023 71.86 6.73 6.56 255.98 6.51 6.43 4907.31 6.81 6.60 176.65 7.15 6.81 23.25 6.08 6.17 5435.05 6.80 6.60
    8.20 , 2023 OMC SB - - - - - - - - - 500.00 6.55 7.10 3970.00 6.29 6.93 4470.00 6.31 6.95
    8.30 , 2023 FERT BONDS 40.00 7.84 7.98 - - - 10.00 7.50 7.75 75.00 7.05 7.45 5.00 7.03 7.44 130.00 7.33 7.64
    8.30 , 2023 FERT SB 12.25 7.58 7.80 141.50 7.50 7.75 108.38 7.48 7.74 340.30 7.39 7.67 132.82 7.12 7.49 735.25 7.38 7.67
    6.35 , 2024 OIL MKT BONDS - - - - - - - - - - - - 1390.00 6.13 6.21 1390.00 6.13 6.21
    8.03 , 2024 FCI SB - - - 30.06 7.45 7.62 9.35 7.59 7.72 122.15 7.01 7.32 1.00 7.01 7.32 162.56 7.12 7.40
    8.20 , 2024 OMC SB 45.00 7.57 7.77 45.11 7.30 7.58 10.00 7.11 7.45 - - - 0.61 6.98 7.37 100.72 7.40 7.65
    8.40 , 2025 OMC SB - - - 104.01 7.35 7.65 - - - - - - - - - 104.01 7.35 7.65
    7.95 , 2026 FERT BONDS 35.00 7.75 7.81 - - - 25.00 7.42 7.56 55.00 7.05 7.30 5.00 6.92 7.21 120.00 7.33 7.50
    7.95 , 2026 FERT SB 143.90 7.80 7.84 107.97 7.59 7.68 150.59 7.43 7.57 322.05 7.37 7.52 108.81 7.12 7.35 833.32 7.45 7.59
    8.24 , 2027 65.00 7.16 7.44 15.00 6.96 7.29 198.00 6.95 7.29 180.50 6.70 7.09 455.00 6.43 6.91 913.50 6.66 7.07
    6.01 , 2028 8.00 6.83 6.58 1.00 6.73 6.51 10.30 6.87 6.61 55.07 6.10 6.07 14.50 6.31 6.20 88.87 6.30 6.21
    6.13 , 2028 1.16 6.91 6.69 10.50 6.88 6.66 1.00 6.59 6.45 62.47 6.24 6.21 40.80 6.53 6.41 115.93 6.41 6.33
    7.95 , 2032 2144.75 7.16 7.30 2423.00 6.94 7.12 8575.90 6.87 7.06 6386.57 6.56 6.81 11425.05 6.38 6.68 30955.27 6.65 6.89
    8.28 , 2032 150.65 7.24 7.42 405.47 7.12 7.32 790.00 6.99 7.22 832.50 6.76 7.03 947.00 6.50 6.83 3125.62 6.81 7.07
    7.50 , 2034 451.10 7.21 7.26 693.00 7.06 7.13 4933.94 7.17 7.22 829.34 7.17 7.20 204.75 6.60 6.75 7112.13 7.15 7.20
    7.40 , 2035 146.95 7.20 7.23 206.15 7.05 7.10 969.30 7.12 7.16 1613.39 6.49 6.63 1442.25 6.43 6.59 4378.04 6.66 6.78
    8.33 , 2036 436.72 7.21 7.36 909.56 7.06 7.22 2223.00 7.00 7.17 1332.23 6.73 6.94 3407.50 6.54 6.79 8309.01 6.79 6.99
    6.83 , 2039 2147.08 7.06 7.03 2612.55 6.94 6.92 966.34 6.77 6.78 - - - - - - 5725.97 6.96 6.94
    Sub-total 41057.52 6.12 7.20 61498.01 5.88 7.05 96407.63 5.98 6.99 64044.78 5.76 6.98 76154.15 5.73 6.82 339162.09 5.88 6.99
    B RBI’s OMO: Sales 44.00 - - 1.00 - - - - - 311 - - 304 - - 660.00 - -
    Purchase 45.00 - - - - - 1135.00 - - 979 - - 3015 - - 5174.00 - -
    Sub-total 89.00 - - 1.00 - - 1135.00 - - 1290.00 - - 3319.00 - - 5834.00 - -
    (A+B) 41146.52 6.12 7.20 61499.01 5.88 7.05 97542.63 5.98 6.99 65334.78 5.76 6.98 79473.15 5.73 6.82 344996.09 5.88 6.99
    3 Market Repo
    Govt Securities 97747.53 119676.60 117813.70 88356.07 91434.36 515028.26
    Sub-total 97747.53 119676.60 117813.70 88356.07 91434.36 515028.26
    4 State Govt Securities 210.03 6.61 7.23 578.99 6.69 7.22 1324.92 6.50 6.97 472.23 6.07 6.98 379.14 6.24 7.08 2965.31 6.44 7.05
    Grand total (1 to 4) 142949.93 187198.38 223548.94 157952.75 174878.90 886528.90

    (-) Means no trading YTM = Yield to maturity in per centage per annum CY = Current yield in per cent per annum SGL = (RBI’s) Subsidiary General Ledger OMO = Open Market Operations OMC SB= Oil Marketing Companies Special Bonds NDS = Negotiated Dealing System OM = Order Matching Segment. Securities with small-size transactions (Rs 85 crore or less) have been dropped from the above list but included in the respective totals.

    (1) Yields are weighted yields, weighted by the amounts of each transaction. (2) Current yield has not been worked out for treasury bills. (3) For Floating Rate Bonds (FRB’s) Current yields are based on the latest half-year yield determined in the auction.

    28 february 28, 2009 vol XLIV No 9

    MONEY MARKET REVIEW

    6.11% in the week ending 9 January and upward sloping yield curve (Graph D) (See further to 6.27% on 16 January, but eased also Appendix Table, p 28). to 6% on 30 January despite the RBI holding rates steady in its review due to a cut 4.1 RBI Reverse Repos, in fuel prices spurring expectations of a OMOs and MSS rate cut in the near future. The spread It is for the first time in 2008-09 so far that between one-year and 10-year paper as the aggregate reverse repo bids tendered well as spread between 10-year and and accepted jumped to a peak of 23-year paper widened, resulting in an Rs 8,15,820 crore following the several

    Table 9: Profile of Major Commercial Bond Issues for the Month of January 2009

    Sr Issuing Company / Rating Nature of Instrument Coupon in % Per Annum and Tenor Amount in No Rs crore

    FIs / Banks

    Corporation Bank

    AAA by Crisil, Care Perpetual Bond 9% with a step up of 50 basis points if call is not

    exercised at the end of 10 years 150

    8

    Graph D: Yield Curves for Dated Securities – Weighted Averages for the First and Last Week of January 2009

    Yield (% per annum) Years to Maturity 5 5.5 6 6.5 7 7.5 123456789 10 11 12 13 14 15 16 17 18 19 20 24 26 27 28 31 Week Ending 2 January Week Ending 30 January

    liquidity augmenting measures taken by the RBI in the past three and a half months; even though the overnight call rates ruled higher above the reverse repo rate, it had

    2 Punjab National Bank marginal impact on inflows. As a result, AAA by Crisil. Perpetual Bond 8.90% with a step up of 50 basis points if call is

    liquidity support through repo bids fell

    not exercised at the end of 10 years 500

    from Rs 56,350 crore in December 2008 to

    3 Canara Bank AAA by Crisil, Icra Lower Tier II Bonds 8.08% for 10 years 300 Rs 8,770 crore in January 2009 (Table 10).

    1 Bank of Baroda With the improvement in liquidity as well AAA by Crisil, Care Perpetual Bonds 8.90% with a step up of 50 basis points if call is

    as increased inflows in mutual fund

    not exercised at the end of 10 year 200 2 Dena Bank

    schemes, the support for the mutual funds AA- by Crisil Lower Tier II Bonds 9.50% for 10 years 200and NBFCs fell to Rs 1,490 crore in January Central PSU

    2009 as against Rs 9,820 crore in December

    1 Indian Railway Finance Corp Ltd Bonds 8.46%, 8.55% and 8.65% for 5 years, 10 years

    2008. The credit lines under forex swaps

    AAA by Crisil, Care. and 15 years, respectively 2,925 2 Neyveli Lignite Corp Ltd were utilised for Rs 245 crore in January. AAA by Crisil, Icra, Fitch Bonds 8.83% for 10 years 500 The turnover in repo outside RBI

    (100)

    increased marginally in January 2009 to

    3 NTPC Ltd AA by Crisil, Icra Bonds 8.65% for 10 years 500

    Rs 5,14,992 crore but average yields fell

    4 India Infrastructure Tax-Free NCD 6.85% for 5 years 2,500 lower to 4.2% as against Rs 5,14,984 crore
    Finance Co Ltd (4,869) at 5.42% in December 2008.
    Corporates
    1 Larsen and Toubro Ltd AAA by Crisil. Bonds 9.20% for 3 years 250 4.2 Commercial Bonds
    2 Tata Communications Ltd Unlike the subdued gilt-edged market, the
    AAA by Care Bonds 11%, 11.2% and11.25% for 5.5 years, 7 years and 10 years, respectively 3 Reliance Gas transportation Infrastructure Ltd Bonds 10.90% and 10.95% for 5 years and 10 years, 250 daily average secondary market turnover in corporate bonds on NSE increased from Rs 308 crore in December 2008 to Rs 377
    AAA by Crisil, Care respectively 2,000 crore in January 2009. Similarly, the com
    Total The amount shown in brackets above denotes the greenshoe option of the issue Total for Jan-08 (a year ago): Rs 5,265 crore. Total for December-08 (a month ago): Rs 18,938 crore 10,275 (4,969) bined total turnover of NSE, BSE and F immda rose from Rs 25,103 crore to
    Source: Various Media Sources. Rs 26,608 crore over the same period.
    Table 10: Operations of RBI’s Liquidity Adjustment Facility ** (Amount in Rs crore)
    For the Week Range of Repo (Injection) * Reverse Repo (Absorption) * Net Injection Net
    (December 2008 Repo/RR Period Bids Received Bids Accepted Bids Received Bids Accepted (+)/ Outstanding
    January 2009) Days Number Amount Number Amount Number Amount Number Amount Daily Absorption (-) Amount
    Averages of of Liquidity at the
    Bids Accepted Week End@
    1 2 3 4 5 6 7 8 9 10 11 12 13
    01 Dec-05 Dec 08 1-14 7 4,685 7 4,685 219 2,43,310 219 2,43,310 48,662 -2,38,625 39,120
    08 Dec-2 Dec 08 1-14 1 600 1 600 91 1,10,470 91 1,10,470 27,618 -1,09,870 18,210
    15 Dec-19 Dec 08 1-14 44 39,890 44 39,890 95 1,30,850 95 1,30,850 26,170 -90,960 5,690
    22 Dec-26 Dec 08 1-14 14 11,175 14 11,175 40 52,195 40 52,195 13,049 -41,020 14,630
    29 Dec-02 Jan 09 1-14 7 4,870 7 4,870 201 2,80,830 201 2,80,830 56,166 -2,75,960 73,320
    05 Jan-09 Jan 09 1-14 1 90 1 90 110 1,87,620 110 1,87,620 46,905 -1,87,530 25,550
    12 Jan-16 Jan 09 1-15 10 7,815 10 7,815 134 1,42,440 134 1,42,440 28,488 -1,34,625 31,795
    19 Jan-23 Jan 09 1-14 1 90 1 90 176 2,52,730 176 2,52,730 50,546 -2,52,640 47,180
    27 Jan-30 Jan 09 ^ 1-90 4 775 4 775 164 2,33,030 164 2,33,030 58,258 -2,32,255 54,605

    # includes special Repo from 14 October 2008. ^ Includes repo under forex swap facility. * With effect from 5 January 2009 the Repo Rate is 5.50% and Reverse Repo Rate 4.00%. * With effect from 8 December 2008 the Repo Rate is 6.50% and Reserve Repo Rate 5%. ** Includes Second LAF Auctions under Repo and Reverse Repo. @ Net of Repo and Reverse Repo Outstandings.

    Economic & Political Weekly

    EPW
    february 28, 2009 vol XLIV No 9

    MICROSOFT

    february 28, 2009 vol XLIV No 9

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