Saturday, April 1, 2023

RBI: RBI put Rs 1 lakh crore in 1 day, highest in 4 years – Usky News



New Delhi: The reserve Bank of India Invested more than Rs 1.1 lakh crore in it on Thursday banking system, indicating the tight liquidity that is needed to control inflation. Bond market players said this was the highest one-day liquidity inflow in four years, though it was negligible in percentage terms.
As per the latest RBI data, net inflows of around Rs 1.1 lakh crore were only 0.6% of deposits, compared to total deposits of Rs 178.6 lakh crore as on February 24. Money market data show that in October 2018, at the peak of the monetary-tightening spree, this percentage had risen above 1.5%.
One of the reasons for the tight liquidity in the system is the reversal of long term repo operations (LTRO). In March-April 2020, when the country was under paralyzing lockdown, institutions borrowed from the central bank through its specially created LTRO window, which was for about 1,100 days. A bond dealer said borrowers were coming in for payments, creating some liquidity crunch in the banking system.

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