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RBI's liquidity ops for banks a temporary fix; cash still in short supply

Currency dealers say the central bank has the scope to do another $5 billion swap, considering that banks have extra dollar holding

RBI’s liquidity operations for banks a temporary fix

The banking sector liquidity continues to remain in deficit despite the various modes of liquidity operations by the Reserve Bank of India (RBI) in the past financial year. The central bank bought about Rs 3 trillion, or an equivalent of 71 per cent of fresh bonds issuance last year from the market, as well as swapped $5 billion for rupee with banks, injecting another Rs 35,000 crore of rupee liquidity into the market. Another $5 billion swap for three-year period is due on April 23. The open market operations (OMOs), through which the central bank bought bonds, and the dollar ...