Amar Ambani Senior President & Institutional Research Head YES Securities

MUMBAI, 09 OCTOBER 2020: RBI’s status quo on rates was along expected lines, given the elevated inflation. But the MPC clearly delivered accommodative moves through non-interest rate tools.

As an endeavor to lower the yields in bond markets, the central bank announced to expand weekly OMO purchases, include State Development Loans as part of its purchases and TLTRO of Rs1 trillion.

We believe, over time, Gsec 10-year yield will drop closer to 5%. 

Rationalization of risk weights on Individual housing loans, now linked only to LTVs, for all new HL sanctioned till March 2022, is a positive for banks. But HFC not mentioned may be a near-term dampener for housing finance stocks. 

We see possibility of further scope of 25-50 basis points cut in Repo policy rates.

Amar Ambani is Senior President & Institutional Research Head, YES Securities

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