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Second COVID wave will dampen India Inc s recovery: Report
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Top headlines: Covishield at Rs 400; Covid shaves off a 5th of ONGC capex
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Flagging an adverse impact of the surge in Covid-19 cases, rating agencies have said some more sectors could move to the “negative outlook” list. Disruption due to lockdown curbs may impact business performance in the first quarter ended June 2021 (Q1FY22) before recovery in the second quarter (Q2FY22). Ramnath Krishnan, president of ratings, ICRA, said the agency would revisit the sectoral outlook for FY22 (made in February 2021) and evaluate the impact on sectors and the overall economy. There are some sectors with a negative outlook. Some more could get added to the “negative outlook” category. In February, things seemed to be coming under control with vaccination, giving the impression the system would cope with the pandemic. In April, the situation went into reverse. At risk of entrenched rough times are sectors like hospitality and those with discretionary spends, said rating agency executives.
Given the massive fiscal expansion scheduled for the next financial year Rs 12 lakh crore of government debt papers are set to flood the market analysts are of the view that the RBI is likely to let the market determine the yields and may not fixate on keeping the 10-year yield below 6 per cent as it did in 2020. This would indicate that the Reserve Bank is moving towards a new equilibrium for yields, something Governor Shaktikanta Das considers as a public good . The RBI left the policy rates unchanged as expected but reiterated its accommodative stance both on the interest rate as well as more importantly on the liquidity side for as long as it takes.
RBI likely to let market determine bond yields, says analysts
The RBI left the policy rates unchanged as expected but reiterated its accommodative stance both on the interest rate as well as more importantly on the liquidity side for as long as it takes. PTI
Reuters
Given the massive fiscal expansion scheduled for the next financial year Rs 12 lakh crore of government debt papers are set to flood the market analysts are of the view that the RBI is likely to let the market determine the yields and may not fixate on keeping the 10-year yield below 6 percent as it did in 2020.
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