RBI likely to cancel next week's T-bill auction given large cash balance

Net liquidity in the banking system was in a deficit of ₹2.32 trillion as of Thursday, and has been in deficit mode for the past fourteen consecutive weeks

The Reserve Bank of India (RBI) is likely to cancel next week’s weekly treasury bill auction, sources said. With the government likely to have a comfortable cash balance, the RBI is looking to support liquidity in the banking system by taking this step, they added. 

“The government is likely to be sitting on a relatively comfortable cash balance now, so the RBI might decide to take the step to support banking system liquidity,” said the treasury head at a private bank. 

Net liquidity in the banking system was in a deficit of ₹2.32 trillion as of Thursday, according to the