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Here's what experts have to say about liquidity crunch

Updated : November 23, 2018 04:47 PM IST

The macros have now turned favourable for Indian markets. On Thursday, rupee rose almost a percent. At 70.67 to a dollar, rupee traded at the highest level since August 29 2018.

The 10-year-bond yield ended at 7.71 percent and that is the lowest level since first week of May. All this as crude fell below $63 per barrel, its lowest level since February 2018, a full 30 percent below its October highs.

How does this change the landscape of interest rates and liquidity in India? The liquidity in the interbank market has also fallen sharply in the entire year since big cash withdrawals in the two weeks leading to Diwali and big dollar sales by RBI this year, when the rupee was depreciating fast.

CNBC-TV18 caught up with B Prasanna, group executive and head, global markets group, ICICI Bank; Sajjid Chinoy, chief India economist, JPMorgan and Soumya Kanti Ghosh, SBI group chief economic advisor, to understand if there is a scope to cut interest rates and not hike them as the policy stance indicates.
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