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Why RBI is draining excess liquidity but also injecting funds
Finance · 2 updates
Why RBI is draining excess liquidity but also injecting funds
Mumbai: In just about six weeks, the Reserve Bank of India has drained banking system liquidity from a peak surplus of ₹11 lakh crore to ₹48,303 crore. How did the central bank withdraw this liquidity and what was the market impact of this? ET explains.Why was there a sudden gush in system liquidity?The banking system was suddenly flushed with liquidity after banks attracted $133 billion dollars from overseas Indians under the FCNR(B) scheme. Banks exchanged these dollars with the RBI through a swap facility, receiving rupee funds in return. Thus, system liquidity, which stood at a surplus of
Why is the RBI pulling liquidity out of banks and injecting it back again?
Mumbai: In just about six weeks, the Reserve Bank of India has drained banking system liquidity from a peak surplus of ₹11 lakh crore to ₹48,303 crore. How did the central bank withdraw this liquidity and what was the market impact of this? ET explains.Why was there a sudden gush in system liquidity?The banking system was suddenly flushed with liquidity after banks attracted $133 billion dollars from overseas Indians under the FCNR(B) scheme. Banks exchanged these dollars with the RBI through a swap facility, receiving rupee funds in return. Thus, system liquidity, which stood at a surplus of
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