Outlook : Money Markets

Cut in T-bill auction amount is a Rs 4,000 crore liquidity shot

The Reserve Bank of India (RBI) sent out positive signals to the money market and has given a boost to the liquidity with its decision to reduce the 91-day treasury bill amount from Rs 1,000 crore to Rs 500 crore for the next eight auctions.

Translating into an additional sum of Rs 4,000 crore available for investment in government paper, this move will give the market a major fillip. The average daily inflows into the repo auctions last week did bare a semblance of tautness in liquidity.

Last week, the average daily repo flows rose marginally to Rs 1,388 crore from the preceding week