The importance of liquidity was dramatically illustrated to local bond investors when Franklin India abruptly shut 6 funds in the biggest-ever forced closure in the nation.
The downswing in credit ratings, triggered by liquidity stress in NBFC sector, had worsened as companies struggled to raise funds & sell assets to pare debt.
A delay in lending to residential projects is adding to the mounting default risk, with as many as 5.60 lakh homes worth Rs 4.5 lakh crore stuck in top cities.
DMK govt accuses Centre of withholding funds, tightening borrowing, unilateral deductions from state accounts. Says Centre's accounting & funding decisions have 'artificially inflated' debt burden.
This is the game every nation is now learning to play. Some are finding new allies or seeing value among nations where they’d seen marginal interest. The starkest example is India & Europe.
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