Dollar Inflows | A Problem Of Plenty For RBI - Impact & Likely Steps:
-$136 bn FCNR(B) inflow means Rs 13 trillion extra system liquidity
-Will pull down call rate, repo rate & the entire yield curve
-Falling yields unwelcome when Inflation is rising & RBI is hinting at rate hike
-Possible tools to absorb excess liquidity: CRR hike, MSS (Market Stabilisation Bonds), OMOs (Open mkt purchase of bonds)
@latha_venkatesh explains. #RBI #BondMarket #Liquidity