Flight to Liquidity and its Real Effects on Debt Market in India during COVID 19

Abstract

Impact of Covid 19 on various segments of the economy is known to us. The various sectors of Indian economy were badly influenced by this pandemic in the year 2020. This paper attempts to highlight the impact of COVID 19 on Indian Debt market. The outburst of coronavirus worldwide had intruded profitability of the companies throughout the world because of lower trades among the countries. This is trim down money and capital market liquidity. Fear of liquidity crisis in the market motivates investors to redeem their investments and leads to stock market crash. This paper strive out various measures adopted by monetary authorities to inject liquidity in the financial system; its impact on credit market, bond market, investors; also some suggestion are made by the researcher for maintaining liquidity in the debt market. This paper is drafted by reviewing the expert (investment bankers, technical and fundamental analyst’s fund manager’s), opinions on prevalent liquidity crunches in the economy.