 "The Reserve Bank of India's (RBI's) decision to cut the cash reserve ratio (CRR) by 50 basis points, injecting liquidity of Rs 1.16 trillion into the banking system, is expected to reduce costs for banks and provide a much-needed boost to credit offt")
The liquidity surplus in the banking system, measured by lenders parking funds in the Reserve Bank of India’s (RBI’s) liquidity adjustment facility (LAF), surged to ₹4.04 trillion on Thursday, highest since May 19, 2022.
The spike is mainly due to increased government spending, following a record ₹2.69 trillion surplus transfer by the central bank in May.
During the seven-day Variable Rate Reverse Repo (VRRR) auction conducted on Thursday, the RBI received bids worth around ₹1.7 trillion against a notified amount of ₹1 trillion. The central bank accepted ₹1 trillion at a cut-off rate of 5.47 per cent.
The bidding was
