Readings: Korean won, RBI moves, F&O margins
Bloomberg: Korean Won Declines Most Since 1997, Stocks Drop on S&P Warning
The Korean currency slumped as much as 12 percent today, extending this year’s loss to 30 percent, Asia’s worst decline, as Standard & Poor’s said yesterday it may cut credit ratings for Kookmin Bank and six other Korean financial companies because of possible difficulties refinancing maturing debt.
South Korea’s foreign-exchange reserves dropped in each of the last six months, sliding $24.6 billion to $239.7 billion as policy makers intervened to stem the won’s slide.
- Business Standard: RBI keeps tap flowing for MFs, revives gilt auctions
With banks borrowing only Rs 3,500 crore through the repo window of Rs 20,000 crore to help mutual funds, the Reserve Bank of India (RBI) today decided to conduct special auctions every day till the limit is reached.
But with liquidity easing in the market and an expectation that the condition will improve further now that the Centre and RBI have announced a package, the government announced two bond auctions for Rs 10,000 crore. The auctions were originally scheduled for last Friday, but were cancelled due to tight market conditions.
The RBI also but the CRR by another 100 bps (now a total 250 bps cut this month): RBI announces further measures for improving domestic and foreign currency liquidity
In a move to ringfence the markets from payment issues, the Securities and Exchange Board of India (Sebi) on Wednesday increased exposure margins for equity derivatives from 5% to 10%, with effect from October 21. That gives derivatives players six days to rejigger their outstanding positions.
V K Sharma, director and head of research at Anagram Securities says open interest currently is not too high to warrant the step. Open interest in the October contract stands at Rs 67,000 crore as opposed to Rs 81,000 crore seen just before the expiry of the September futures.
Oh this will not be fun. And we get a further drop in trading volumes after Oct 21.
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