Indian Banking Liquidity Deficit Hits Highest in Six Months
6 days, 19 hours ago

Indian Banking Liquidity Deficit Hits Highest in Six Months

Live Mint  

-- The liquidity deficit in the Indian banking system hit the highest in nearly six months on advance tax payments by companies and likely dollar sales by the central bank to curb rupee volatility. The banking system cash deficit, as measured by banks’ borrowings from the Reserve Bank of India, was at 1.5 trillion rupees as of Monday, the highest since June 24, according to a Bloomberg Economics index. The cash deficit widened even as the central bank has recently taken steps to boost banking liquidity, including a cut in the cash-reserve ratio and higher amounts of funds offered through so-called variable rate repo auctions. “More measures are required to boost or keep liquidity in surplus going forward, either through open-market-bond purchases, more term repos, FX swaps or another CRR cut.” Read: Dollar Selling by RBI Is Starving Indian Banks of Liquidity The cash shortfall pushed up the interbank weighted average call rate — a benchmark for overnight borrowing costs — to as much as 35 basis points above the central bank’s benchmark repo rate of 6.50%.

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History of this topic

Record trade deficit adds to rupee’s challenges, may open to all-time low
1 week ago

Record trade deficit adds to rupee’s challenges, may open to all-time low

Live Mint  

By Nimesh Vora MUMBAI, Dec 17 - The Indian rupee may slip to an all-time low on Tuesday with the currency, already under pressure from slowing growth, choppy equity flows and a dollar rally, will have to contend with an unexpected widening in trade deficit to a record high. The jump in gold imports and weak exports pushed India's merchandise …

RBI reduces CRR to 4% for liquidity boost. 3 things to know
2 weeks, 4 days ago

RBI reduces CRR to 4% for liquidity boost. 3 things to know

India Today  

The Reserve Bank of India's Monetary Policy Committee has reduced the cash reserve ratio to 4% from 4.5% to address liquidity woes, announced Governor Shaktikanta Das. RBI Governor Shaktikanta Das said that lowering the Cash Reserve Ratio is consistent with the central bank's neutral policy stance. “A CRR cut would inject liquidity into the banking system, providing a cushion for …

RBI Is Said to Shore Up Banking Liquidity Before Rate Decision
2 weeks, 5 days ago

RBI Is Said to Shore Up Banking Liquidity Before Rate Decision

Live Mint  

-- India’s central bank has been shoring up banking system liquidity ahead of a key policy decision, having depleted it in recent days in its efforts to stabilize the rupee, according to people familiar with its transactions. The moves come at a time when the slowest pace of economic expansion in almost two years is mounting pressure on central bank …

RBI Inquiries on Liquidity Spur Speculation of Action Next Week
3 weeks, 3 days ago

RBI Inquiries on Liquidity Spur Speculation of Action Next Week

Live Mint  

-- India’s central bank has stepped up dialogue with traders at treasury desks this week about cash conditions in the banking system, according to people with knowledge of the matter, spurring speculation it may announce some measures to boost liquidity at the policy review on Dec. 6. Banks turned net borrowers from the central bank this week compared with a …

India's current account deficit gap widens in April-June: RBI
2 months, 3 weeks ago

India's current account deficit gap widens in April-June: RBI

Hindustan Times  

India's current account deficit widened on-year in the April-June quarter, largely due to a higher merchandise trade deficit, the central bank said on Monday. The Reserve Bank of India reported a current account deficit of $9.7 billion for April-June, driven by a $65.1 billion merchandise trade deficit. The current account deficit stood at $9.7 billion, or 1.1% of the GDP, …

RBI MONEY MARKET OPERATIONS
7 months, 2 weeks ago

RBI MONEY MARKET OPERATIONS

Live Mint  

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8 months ago

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The Hindu  

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India's June quarter current account deficit narrows to 1.1 per cent: RBI
1 year, 2 months ago

India's June quarter current account deficit narrows to 1.1 per cent: RBI

Hindustan Times  

India's current account deficit narrowed to USD 9.2 billion or 1.1 per cent of GDP for the April-June period, the Reserve Bank said on Thursday. The net external commercial borrowings to India recorded an inflow of USD 5.6 billion in the quarter compared to an outflow of USD 2.9 billion a year ago, the RBI said The current account deficit, …

Deposit of ₹2000 notes, rise in RBI dividends to improve short-term liquidity
1 year, 6 months ago

Deposit of ₹2000 notes, rise in RBI dividends to improve short-term liquidity

Live Mint  

There will be an improvement in short-term liquidity due to an increase in RBI dividends and deposit of ₹2,000 notes by banks till September, predicts India Ratings in its latest edition of the monthly credit market tracking report. The report highlighted that the Banking system liquidity declined as of 25 May 2023 to around ₹500 billion on average. “Decline in …

RBI says India’s growth momentum to continue in FY24; stresses on structural reforms
1 year, 6 months ago

RBI says India’s growth momentum to continue in FY24; stresses on structural reforms

The Hindu  

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RBI may buy $18 bn of bonds to boost liquidity, says B. Prasanna of ICICI
1 year, 6 months ago

RBI may buy $18 bn of bonds to boost liquidity, says B. Prasanna of ICICI

Live Mint  

The Reserve Bank of India may buy nearly $18 billion of government bonds to replenish banking liquidity that’s expected to tighten later in the year, according to a report by Bloomberg. The central bank may cut the cash reserve ratio by half a point in the second half of the fiscal and start buying bonds in the December quarter to …

Tightening liquidity may force Indian banks to compete harder for deposits
2 years, 3 months ago

Tightening liquidity may force Indian banks to compete harder for deposits

Live Mint  

Indian banks may be forced to compete harder to boost deposits amid tightening liquidity and rising credit demand ahead of the festive season, analysts warned. With excess liquidity in the banking system over the last couple of years on account of the cash infused by the RBI during the pandemic, banks chose to rely on raising funds from money markets …

Indian rupee hits record low on CAD concerns
2 years, 5 months ago

Indian rupee hits record low on CAD concerns

The Hindu  

The Indian rupee hit a record low against the U.S. dollar on Tuesday as concerns of a wider current account deficit came to the forefront after the country's trade deficit hit an all-time high in June. Data late on Monday showed India's June trade deficit widened to a record high of $25.63 billion, following a rise in crude oil and …

India Records 0.2% Current Account Deficit in December Quarter
3 years, 8 months ago

India Records 0.2% Current Account Deficit in December Quarter

News 18  

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3 years, 10 months ago

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Business Standard  

No tinkering with the direct taxes, capital gains taxes or security transaction tax, and no announcement of Covid tax on super-rich left bulls untamed at the bourses who managed to entirely reverse previous week's losses and clock the sharpest-ever Budget rally, in absolute terms, on Monday. Budget proposals nudged sectors like financials, insurance, and infrastructure with shares of financials including …

Bond turmoil on India’s cash drain shows market fragility
3 years, 11 months ago

Bond turmoil on India’s cash drain shows market fragility

Live Mint  

The Reserve Bank of India’s first steps to revive money-market rates proved how fragile sentiment remains, as a spike in bond yields spurred policy makers to announce more buying to quell the turbulence and protect the economy’s nascent recovery. The central bank’s first 14-day reverse-repurchase operation since March saw rates on short-dated sovereign bonds rise as much as 33 basis …

RBI drains ₹2 trillion in bid to nudge shorter rates higher
3 years, 11 months ago

RBI drains ₹2 trillion in bid to nudge shorter rates higher

Live Mint  

India’s central bank drained 2 trillion rupees from the banking system on Friday, as it seeks to push up money-market rates that had crashed below the reverse repo rate. The cutoff for the 14-day reverse repurchase operation was set at 3.55%, 20 basis points higher than the central bank’s reverse repo rate of 3.35%. The RBI is draining excess cash …

Treasury bill yields rise in India after RBI’s cash move
3 years, 11 months ago

Treasury bill yields rise in India after RBI’s cash move

Live Mint  

India’s Treasury bill yields rose at an auction after the central bank took the first step toward paring back on some of its pandemic relief measures. The 190 billion rupees sale was the first sovereign auction since the Reserve Bank of India said late on Friday it plans to drain cash via a reverse repo operation. “After today’s T-bill auction, …

Wave of foreign money threatens India’s tight grip on rupee
4 years ago

Wave of foreign money threatens India’s tight grip on rupee

Live Mint  

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4 years ago

Focus on surplus liquidity with rate cut seen remote

Live Mint  

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Short-term rates crash in India with funds overflowing with cash
4 years ago

Short-term rates crash in India with funds overflowing with cash

Live Mint  

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Loose monetary policy is worsening wealth inequality
4 years, 2 months ago

Loose monetary policy is worsening wealth inequality

Live Mint  

The size of the Atmanirbhar Bharat package announced by Prime Minister Narendra Modi in May was estimated to be about ₹20 trillion, or nearly 10% of gross domestic product. Thus, the actual payout from the Centre’s treasury, or the fiscal resources that would flow out, would only occur in cases of delinquency on these loans, which were presumably at least …

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