MUMBAI (Reuters) - The Reserve Bank of India (RBI) said on Thursday it would reserve the right to inject less funds via term repo auctions than notified, saying ample liquidity in money markets had reduced demand for these short-term debt products.
The central bank has been conducting frequent term repo auctions since introducing them in 2013 to ease the regular cash deficit in the country's financial system.
However, the RBI said, "sizable surplus liquidity conditions" had prevailed in July, and said it would from now on reserve the right to inject less funds than notified.
"Signals from the market suggest that the system level demand for liquidity remains below the amounts of assured liquidity provided by the Reserve Bank," the central bank said in a statement.
The announcement was made as part of the RBI's notification it planned to inject 695 billion rupees ($10.89 billion) via term repos, spread out over next two weeks.
($1 = 63.7929 rupees)
(Reporting by Himank Sharma; Editing by Rafael Nam)
