RBI May Soon Allow Repo Operations In Corporate Bonds

The Reserve Bank of India may soon allow corporate bonds as collateral for repurchase operations in an attempt to cool the recent sharp uptick in corporate bond yields in the wake of the coronavirus outbreak, two sources told Reuters.

"We have to work it out. Under the RBI Act, we are not allowed to take any other collateral other than government securities. But we are not looking upon that as an impediment," a senior official said.

"We will look at ways in which we can directly reach the corporates. We are saying just give us time to work our way through these regulations and all, but we are indeed looking at directly helping them out," the official added.

The RBI did not immediately respond to a request for comment.

(Reuters)