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Bank borrowings from the central bank’s liquidity adjustment facility (LAF) window have climbed sharply, indicating that Mint Road has moderated the supply of money to restrain inflation. Latest data from the Reserve Bank of India (RBI) showed banks borrowed ₹73,297 crore from the central banks through different LAF windows in a drastic change from the…
The Reserve Bank of India (RBI) seems to be relying on buy-sell currency swap trades to neutralise the liquidity impact of conventional spot-market interventions, helping the local unit to stabilise itself against the US dollar while simultaneously ensuring adequate rupee availability to boost economic growth. “While the RBI did extend dollar selling, it was seen…
India‘s central bank may have to reverse its approach towards the currency markets and liquidity management after an ungainly spike in overnight lending rates Monday reflected the near-total erosion in systemic surplus-from about ₹8 lakh crore a year ago to within touching distance of a deficit last week. To be sure, the odds haven’t lengthened…