There are, no doubt, tax-related, accounting, and legal obstacles to expanding the use of principal writedowns. For example, investors in different tranches of mortgage-backed securities may not benefit equally, securitized trusts may not be permitted to acquire new equity warrants, and principal writedowns may require a different accounting treatment than interest rate reductions.
Concurrently, sale of FX by the Bank absorbed rupee excess liquidity equivalent to around Rs18.1 billion over the period 28 September 2022 to 13 December 2022. Foreign Exchange Market The month of November was marked by the significant intervention amount of USD300 million, representing the highest amount sold by the Bank in any given month.