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RBI pumps in ₹45 lakh crore liquidity since Dec

The New Indian Express Kochi

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February 20, 2025

Liquidity remains tight for banks as money borrowed via VRR auctions have to be returned on everyday basis to RBI

- BENN KOCHUVEEDAN @ Mumbai

THE Reserve Bank has injected a whopping ₹45 lakh crore into the banking system since the December 6 monetary policy review when it slashed the cash reserve ratio by 50 bps to 4%, releasing ₹1.16 lakh crore into the system.

Of the total, more than ₹43 lakh crore of fresh liquidity has flown into the system between December 11 when the new governor Sanjay Malhotra assumed office and up to February 18, when the central bank pumped in another ₹1 lakh crore through the variable repo auction, which it launched on a daily basis from January 15. Malhotra's term began with two serious challenges--a bleeding rupee, which has seen its worst days under him, having sniffed at 88 to the dollar last week, and very tight liquidity conditions, which has been dogging the system since November.

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