Why RBI is draining excess liquidity but also injecting funds
Reserve Bank of India has significantly reduced banking system liquidity from a peak surplus in a short time.
Liquidity surged after banks received funds from overseas Indians under the FCNR(B) scheme.
The central bank utilized reverse repo auctions and cash reserve ratio adjustments to absorb this surplus effectively.
As overnight rates increased following these liquidity measures, RBI temporarily infused funds to manage sharp rate rises.
5News aggregated this summary from the outlet’s public feed. The full article, with all the context, is on economictimes.indiatimes.com — the content belongs to The Economic Times.
