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Old 10-05-2016, 10:31 PM
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megri megri is offline
Join Date: Dec 2004
Location: Chandigarh India
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Default 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

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Last edited by megri : 10-05-2016 at 10:47 PM.
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