💨 Abstract

Indian banks have requested the Reserve Bank of India (RBI) to inject durable liquidity into the banking system due to a significant dip in liquidity levels. The tight liquidity conditions could lead to increased borrowing rates for banks, potentially impacting lending rates at a time of cooling economic growth. Suggestions for addressing the issue include longer term variable rate repos, FX swaps, open market purchases of bonds, and a temporary reduction in the cash reserve ratio.

Courtesy: theprint.in