Announcement

Collapse
No announcement yet.

Credit Policy Review by Khushwant Pahwa, FIAI, FIA

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Credit Policy Review by Khushwant Pahwa, FIAI, FIA

    In its first credit policy review, the newly constituted Monetary Policy Committee (MPC) reduced the repo rate by 25 bps. Thus, the repo rate has been cut from 6.50% to 6.25% and the reverse repo rate from 6.0% to 5.75%, while the cash reserve ratio (CRR) remains unchanged at 4%.

    Outlook: Bond Yields and Impact on Actuarial Valuations

    Low and stable inflation, continuing weak private investments, potential of strong capital flows from debt FPIs and, importantly, RBI highlighting the fact that a more appropriate real rate for India is around 1.25% to 1.75% (as against 1.50% to 2.00% currently) are all factors that provide room for further easing of rates and are supportive of lower yields going forward.

    From actuarial valuation of employee benefits perspective, the Companies have already experienced a fall of up to 85 bps in the discount rates during the first two quarters of this financial year. With room for further lowering of interest rates, we expect to see liabilities and expenses rise significantly compared to last financial year
    Last edited by Parveen Komal; 10-05-2016, 10:47 PM.
    Founder & Creative Mind of Megrisoft
    www.indiabook.com
    Business
    Please Do Not Spam Our Forum
Working...
X