{"id":317214,"date":"2023-10-10T08:27:21","date_gmt":"2023-10-10T08:27:21","guid":{"rendered":"https:\/\/popularindinews.com\/?p=317214"},"modified":"2023-10-10T08:27:21","modified_gmt":"2023-10-10T08:27:21","slug":"banking-system-liquidity-bounces-back-to-surplus-after-three-weeks","status":"publish","type":"post","link":"https:\/\/popularindinews.com\/india\/banking-system-liquidity-bounces-back-to-surplus-after-three-weeks\/","title":{"rendered":"Banking system liquidity bounces back to surplus after three weeks"},"content":{"rendered":"

The banking system liquidity bounced back to surplus mode after three weeks, the Reserve Bank of India (RBI) data showed.<\/p>\n

<\/p>\n

This was due to government spending, according to dealers.<\/p>\n

The liquidity situation could further ease with the disbursement of the last tranche of incremental cash reserve ratio (I-CRR) worth Rs 50,000 crore on Saturday.<\/p>\n

As the liquidity improved, bond market participants expected the RBI to announce open market operation (OMO) of bond sales to suck out the excess.<\/p>\n

The market expects the central bank to sell bonds worth between Rs 10,000 crore and Rs 15,000 crore in the auction.<\/p>\n

Consequently, traders squared off their positions by the end of the trade, leading to the hardening of the yields.<\/p>\n

The yield on the benchmark 10-year government bond settled at 7.38 per cent on Monday, against 7.34 per cent on Friday.<\/p>\n

The liquidity improved because of the government spending, and rollback of I-CRR,  a dealer at a primary dealers said.<\/p>\n

As the liquidity is in surplus now, there are expectations the RBI will come up with a notification on OMO.<\/p>\n

That’s why the yields rose by the end of the day,  he said.<\/p>\n

Banks parked Rs 2,760 crore on Friday, according to the RBI data.<\/p>\n

The lenders parked Rs 5,390 crore and Rs 9,071 crore on Saturday and Sunday, respectively.<\/p>\n

RBI Governor Shaktikanta Das had on Friday said the central bank might conduct OMOs to mop up excess liquidity.<\/p>\n

Going forward, while remaining nimble, we may have to consider OMO sales to manage liquidity, consistent with the stance of monetary policy.<\/p>\n

The timing and quantum of such operations will depend on the evolving liquidity conditions,  Das had said.<\/p>\n

The rate-setting panel has identified high inflation as a major risk to macroeconomic stability and sustainable growth, he had said.<\/p>\n

Accordingly, the focus remains on aligning inflation to the 4 per cent target on a durable basis.<\/p>\n

Market expects the surplus liquidity to persist for the next two weeks before the Goods and Service tax outflows starting around October 20.<\/p>\n

The liquidity should remain positive for two weeks, and then we have GST outflows from 19-20 October, it will again move to deficit mode, a dealer at another primary dealership said.<\/p>\n

The deficit liquidity neared Rs 1.47 trillion on September 19, the highest since January 29, 2020, when the banking system liquidity deficit went up to Rs 3 trillion.<\/p>\n

The liquidity went into deficit mode on August 21 for the first time in the current financial year.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The banking system liquidity bounced back to surplus mode after three weeks, the Reserve Bank of India (RBI) data showed.<\/p>\n","protected":false},"author":3,"featured_media":317213,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nBanking system liquidity bounces back to surplus after three weeks - Popular Indi News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/popularindinews.com\/india\/banking-system-liquidity-bounces-back-to-surplus-after-three-weeks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Banking system liquidity bounces back to surplus after three weeks - Popular Indi News\" \/>\n<meta property=\"og:description\" content=\"The banking system liquidity bounced back to surplus mode after three weeks, the Reserve Bank of India (RBI) data showed.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/popularindinews.com\/india\/banking-system-liquidity-bounces-back-to-surplus-after-three-weeks\/\" \/>\n<meta property=\"og:site_name\" content=\"Popular Indi News\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-10T08:27:21+00:00\" \/>\n<meta name=\"author\" content=\"Ernie\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/popularindinews.com\/wp-content\/uploads\/2023\/10\/Banking-system-liquidity-bounces-back-to-surplus-after-three-weeks.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Ernie\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/popularindinews.com\/india\/banking-system-liquidity-bounces-back-to-surplus-after-three-weeks\/\",\"url\":\"https:\/\/popularindinews.com\/india\/banking-system-liquidity-bounces-back-to-surplus-after-three-weeks\/\",\"name\":\"Banking system liquidity bounces back to surplus after three weeks - 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