 "RBI")
A combination of factors including the Reserve Bank of India’s (RBI’s) interventions in the foreign exchange market and strong momentum in credit demand have led to surplus liquidity in the banking system declining significantly this month.
From a daily average absorption (the quantum of funds parked by banks) of Rs 1.88 trillion in July, the amount has declined to Rs 1.26 trillion so far in the month of August, the RBI data shows. Daily absorption under the RBI’s liquidity adjustment facility (LAF) was below Rs 1 trillion from Monday to Thursday this week.
The data also shows more instances of the daily quantum of funds deployed with the central bank falling to less than Rs 1 trillion than in the previous month.
