RBI MPC member predicts ‘less severe’ high food inflation
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) member highlighted that going ahead, as India develops, the problem of high food inflation would be "less severe".
To ease out liquidity pressures on mutual funds, the Reserve Bank of India (RBI) on Monday announced the opening of a special liquidity facility of Rs 50,000 crore for mutual funds.
This liquidity facility for mutual funds will be effective from April 27, 2020 till May 11, 2020 or until the utilization of the granted amount, whichever is earlier.
The Central Bank’s announcement brought a surge immediately in the stock market with the BSE Sensex jumping over 750 points.
Advertisement
Earlier, hit hardly by the Coronavirus pandemic, Franklin Templeton Mutual Fund had closed down six of its debt schemes in India effective April 23, citing lack of liquidity in the debt market and unprecedented redemptions in these yield-oriented schemes, giving a big jolt to the mutual fund investors.
The six debt mutual funds which were shut are Franklin India Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund and Income Opportunities Fund, the company said in a statement.
The RBI said liquidity strains have “intensified in the wake of redemption pressures related to closure of some debt MFs (mutual funds) and potential contagious effects therefrom”.
But the Central Bank reassured that it “remains vigilant and will take whatever steps are necessary to mitigate the economic impact of COVID-19 and preserve financial stability.”
The RBI shall conduct repo operations of 90 days tenor at the fixed repo rate.
Advertisement
