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RBI willing to pump more cash into banks to manage liquidity mismatches

15 February, 2018

The Reserve Bank of India will be ready to inject adequate amount of extra cash into banks if needed ahead of March-end to give flexibility to lenders to manage their liquidity mismatches that typically happen at quarter-end, it said in a release on Thursday.

The Reserve Bank of India said it “stands ready” to provide additional cash “using a combination of appropriate instruments” without giving any further details on specific steps, to address any extra demand for liquidity due to advance tax payments and increase in withdrawal of cash from banks towards March-end.

The 10-year benchmark bond yield briefly eased by 1 basis point to 7.58 percent, but came back to 7.59 percent as hopes of open market purchases of bonds stayed feeble.

The RBI will also allow standalone primary dealers to avail term repo auctions on March 28, it said.

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RBI willing to pump more cash into banks to manage liquidity mismatches

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