Market crash feared, now, FM Arun Jaitley surprises with liquidity announcement
After the Reserve Bank of India and market watchdog Sebi announcements to the effect that they are watching the financial markets and will step in if things get worse, it was the turn of FM Arun Jaitley to surprise all by making an announcement before the markets opened today.
After the Reserve Bank of India and market watchdog Sebi announcements to the effect that they are watching the financial markets and will step in if things get worse, it was the turn of FM Arun Jaitley to surprise all by making an announcement before the markets opened today. On Sunday, PTI said that some reports suggested that some unscrupulous elements are trying to destabilise markets to malign the image of the Narendra Modi led NDA government.
Jaitley said that the PM Modi led government is ready to take steps to ensure adequate liquidity is maintained/provided to NBFCs, mutual funds and SMEs today.
Jaitley's announcement today came in the midst stock markets going through extreme volatility that caused it to crash over 1200 points in intra-day trade on Friday over concerns of liquidity crisis being faced by some non banking finance companies (NBFCs).
Arun Jaitley took to Twitter to say, "The Government will take all measures to ensure that adequate liquidity is maintained/provided to the NBFCs, the mutual funds and the SMEs."
Notably, the finance minister tweeted his message just ahead of the opening of stock markets on Monday.
Investors are also worried about the rising oil prices, fleeing FPIs as well as the crashing rupee. Apart from that there are liquidity concerns following default in repayment of loans by IL&FS group. Housing finance company, Dewan Housing Finance (DHFL), too is reportedly facing a liquidity crisis although the lender has rushed to say that it is facing no such problems.
Yesterday, both RBI and Sebi had declared that they are "closely monitoring" activities in the financial markets and ready to take appropriate actions, if required, following a sharp meltdown on Friday in equity and debt markets.
Central bank and market watchdog said, "The Reserve Bank of India and the Securities and Exchange Board of India are closely monitoring recent developments in financial markets and are ready to take appropriate actions, if necessary".
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In fact, the situation even forced SBI Chairman Rajnish Kumar to react and he said there was no concern on liquidity of NBFCs in view of their liquid cash position and availability of committed lines.