Business Daily from THE HINDU group of publications
Tuesday, Jun 10, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Tuesday, Jun 10, 2008 ePaper | Mobile/PDA Version | Audio |
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Money & Banking
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RBI & Other Central Banks Industry & Economy - Petroleum RBI begins purchasing oil bonds under special market operations The bank is yet to finalise the operational guidelines for the special market operations. Our Bureau Mumbai, June 9 The Reserve Bank of India has started purchasing oil bonds under the special market operations, from oil companies, last week. It is understood that the first transaction of about Rs 1,000 crore was done by State Bank of India and the yield on the bond was about 8.75 or 8.76 per cent. However, most dealers from other banks were unaware if the sale of oil bonds had started. A senior official from a public sector bank, said, “It is the oil companies that would designate the banks from whom they can secure foreign currency. Although the business does not offer us huge profits, the volumes are big,” he said. The Government had announced that it will issue oil bonds worth Rs 94,600 crore in the fiscal 2008-09. Treasury officials also said that the forex requirement of oil companies is far more than the overall ceiling of Rs 1,000 crore on a single day. On an average, the total dollar requirement of oil companies works out to be around $450 million. According to the head of treasury of a public sector bank, the RBI is yet to finalise the operational guidelines for the special market operations. It is yet to decide what percentage would be ‘outright’ and what percentage would be ‘repo’. Also, it is not clear how long the repo will be and at what rate. The designate banks may perhaps be those banks that oil companies regularly bank with, the official said. Dealers also said that despite the announcement of special market operations, oil companies were still tapping the forex market for dollars. They said that there is still confusion about whether the dollars will be given through the designated banks or by the RBI directly. More Stories on : RBI & Other Central Banks | Petroleum | Corporate Bonds
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