Liquidity slides into deficit for first time in over 3 years: RBI data

Days of easy money over as credit growth rises

reserve bank of india

When the RBI sells dollars, it sucks out rupee liquidity from the banking system

Bhaskar Dutta Mumbai
Liquidity in the banking system — as gauged by the Reserve Bank of India’s (RBI’s) daily operations — has slipped into a deficit mode for the first time in over three years, signalling a structural shift away from loose financial conditions in the economy.

According to the RBI’s daily data on money market operations, the central bank infused net liquidity worth Rs 21,873.43 crore into the banking system on September 20 —most since May 2019, money market officials said. This means commercial banks, which were thus far parking their excess funds with the RBI, are now borrowing from it via the marginal standing facility window a rate of 5.65 per cent.

The drying up of liquidity means banks will up

First Published: Sep 21 2022 | 8:29 PM IST

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