Morning Alert..
*RBI may tighten liquidity via iCRR before resorting to repo rate hike*
The Reserve Bank of India (RBI) may tighten liquidity by imposing an incremental cash reserve ratio (iCRR), requiring banks to park a larger share of fresh deposits with the central bank, before resorting to a repo rate hike to make monetary transmission more effective in a tighter interest rate regime. The possibility of a policy repo rate hike has increased following the release of the Monetary Policy Committee’s (MPC’s) minutes, which were seen as hawkish. Economists now see October as a possibility, against earlier expectations of a rate action in the next financial year. The case for an incremental CRR comes amid rising surplus liquidity in the banking system. Core, or durable, liquidity is expected to increase further as government spending picks up ahead of the festival season. Overnight benchmark rates —weighted average call rate (WACR) for the triparty repo (Treps) rate —have already been trading below the repo rate despite the RBI conducting daily variable rate reverse repo (VRRR) auctions to absorb excess liquidity. VRRR auctions are aimed at draining transient liquidity. “We expect the MPC to start the rate hike cycle in December at the latest. We don’t rule out a rate hike in the October policy itself,” said A Prasanna, chief economist at ICICI Securities Primary Dealership.
*Global market action*
Dow Jones – Up by 0.34% or 179.35 points
FTSE – Down by 0.07% or 8.04 points
CAC – Up by 0.27% or 23.19 points
DAX – Up by 0.08% or 19.82 points
Gift Nifty – Down by 0.16% or 39.50 points
*FII/DII activities*
FII – Bought 502.63Cr worth of shares
DII – Bought 6425.16Cr worth of shares.
*Major Indian Indices PE*
Nifty 50 – 20.5x
Nifty Bank – 13.7x
*Stocks with high delivery percentage*
HDB Financial Services Ltd – 91%
IGIL – 87%
Emami Ltd – 75.9%
JSW Cement Ltd – 75.7%
*Primary market activities*
IPOs opening today
Lumino Industries Ltd (Main board) – Issue size 700Cr
Kwick Forensic Solutions Ltd (BSE SME) – Issue size 50.77Cr
*Commodities updates*
Gold – Rs 159004/10gm, Silver – Rs 238554/kg, Brcrude – Rs 7890/barrel, Copper – Rs 1381/kg.
August 27, 2026 7.6K 2
