India cenbank to infuse longer-term liquidity via 14-day variable repo
Adds details
By Dharamraj Dhutia
MUMBAI, Feb 9 (Reuters) -The Indian central bank is infusing longer-termliquidity into the financial system, it said on Thursday.
The Reserve Bank of India will conduct a 14-day variable rate repo auction on Feb. 10, 2023 for an aggregate amount of 500 billion rupees ($6.06 billion), it said in a release.
Liquidity in the bankingsystem has been oscillating between a marginal deficit and a surplus over the last few days against the backdrop ofa strong pick-up in bank credit and accelerated government spending.
The liquidity deficitstood at 112 billion rupees on Wednesday, down from a surplus of over 650 billion rupees at the start of the week.
The need for banks to maintain reserve requirements before Friday and for businesses to pay up excise taxes led to heavy borrowing from the overnight inter-bank market and pushed up call money rates to as high as 6.75%, above the policy repo rate of 6.5%.
While infusing liquidity, the RBI will skip a weekly variable rate reverse repo auction, designed to absorb liquidity this week, it said.
($1 = 82.5370 Indian rupees)
Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee and Saumyadeb Chakrabarty
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
