Economy · India
RBI Acts to Absorb Record Liquidity Surge in Banking System
The Reserve Bank of India (RBI) is undertaking measures to absorb a significant surge of liquidity in the Indian banking system, which has been exacerbated by record diaspora inflows. The banking system is awash with surplus liquidity, reportedly reaching ₹7 lakh crore and potentially exceeding ₹15 lakh crore. To address this, the RBI announced a 30-day variable rate reverse repo (VRRR) auction for September 7 to withdraw ₹7 lakh crore. Additionally, the RBI is tapping longer-duration reverse repos and considering a potential interest rate hike in October, as call money rates have fallen below the policy repo rate. These actions aim to manage liquidity and potentially control inflation.
How outlets across the spectrum covered it
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- Centre (7): Business Standard, Mint, Telangana Today, The Economic Times, The Financial Express, The Free Press Journal, The Hindu BusinessLine
- International (2): Bloomberg, Reuters