💨 Abstract

India's banking system liquidity deficit is expected to widen in the upcoming quarter, reaching its highest level in nearly seven months, due to tax outflows and foreign exchange intervention by the central bank. This could hinder the transmission of lower interest rates into the economy. Market participants suggest durable liquidity injection, such as open market bond purchases, to address the deficit.

Courtesy: theprint.in

Summarized by Einstein Beta 🤖