When liquidity vanishes from the financial system, investors often run to gold. But the story isn’t so simple during a short-term funding shock. Gold during a repo market crisis behaves in surprising and sometimes contradictory ways. The immediate reaction can involve sharp declines, even when long-term fundamentals remain bullish. Understanding how gold behaves in these…
Mumbai: The weighted average call rate, which indicates banks’ overnight cost of borrowing, closed at 6.68% on Monday, 18 basis points higher than the Reserve Bank of India’s current repo rate of 6.50%, despite surplus liquidity conditions in the banking system, money market dealers said. The WACR, which is the operating target of the RBI‘s…
June 21, 2024June 21, 2024 In the world of monetary policy, two interest rates play important roles: the REPO Rate and the Reverse REPO Rate in India. These rates, set by the central bank, significantly impact the functioning of financial markets and the overall economy. Let’s dive into their…