‘Longer-Term Repos Over OMOs Negative for Bond Mkt’:Kotak Equities

New Delhi: A liquidity deficit stance along with the preference of longer-term variable rate repos over open market operations (OMOs) of RBI will be negative for the bond markets, Kotak Institutional Equities said on Friday.

Reacting over the just-released Liquidity management framework of RBI, the report said RBI has opted for near status quo.

"Overall, we believe that a liquidity deficit stance along with the preference of longer-term variable rate repos over open market operations (OMOs) will be negative for the bond markets. However, the framework does allow for flexibility if financial conditions warrant maintaining a liquidity surplus in the near term, keeping hopes of OMO purchases alive," the Kotak report said. (IANS)

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