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Festival spending, GST outflows push banking system liquidity into deficit

The net liquidity in the banking system has remained in deficit mode for four consecutive days. The system liquidity was in a deficit of Rs 2,645 crore on Thursday, the latest data by the RBI showed

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To ease the strain, the RBI conducted a three-day variable rate repo (VRR) auction. The central bank injected Rs 30,750 crore into the banking system. | File Image

Anjali Kumari Mumbai
Banking system liquidity fell into deficit mode in the current week after a month, since September 24, due to currency leakage amid festival season and goods and services tax (GST) outflows. 
The central bank plans to infuse Rs. 1 trillion on Monday via overnight VRR auction. 
 
Foreign exchange market participants said increased intervention by the Reserve Bank of India (RBI) via dollar sales further weighed on system liquidity.
 
Net liquidity in banking has remained in deficit mode for four consecutive days. The system liquidity was in a deficit of ₹2,645 crore on Thursday, latest data by the RBI showed.
 
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