Archive for October 3rd, 2013

Forget US shutdown, India might be on the verge of a shutdown..

October 3, 2013

We are truly living in an age where one can no more say such economic events are impossible. As the several “Be positive” speakers show Impossible says I ‘m Possible. So it is like all the macro events once called as impossible are shouting Hey mate..I am Possible too! Taleb’s black swans are increasingly becoming white!!  

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RBI’s Marginal Standing facility — Basics and Some history

October 3, 2013

RBI’s Marginal Standing facility or MSF became a point of attention thanks to RBI’s policy measures in Jul-13 to shore the Rupee (15-Jul-13 and 23-Jul-13). RBI basically did not touch the main policy rate – Repo and hiked MSF rate by 200 bps to 10.25%. Traditionally, MSF has been higher than Repo by 100 bps and the difference then was 300 bps. Then again on 20-Sep-13, it lowered the MSF rate by 75 bps to 9.5% making it 200 bps above Repo (as Repo was hiked to 7.5%).

I have been following some reports and articles on MSF basics, changes and so on. But not much clarity. So decided to try and make things a little simpler:

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