₹70k-cr boost likely as first 25-bps CRR cut takes effect

LIQUIDITY MANAGEMENT

- KSHIPRA PETKAR & CHRISTINA TITUS

THE FIRST OF four cuts in the cash reserve ratio (CRR) of 25 basis points will be done on Saturday, which is expected to release liquidity of roughly around ₹60,000-₹70,000 crores in the banking system, market participants said.

"It coincides with the busy season thereby reducing the liquidity stress that sets in in December to March period. It also gives RBI to manage liquidity without disturbing other segments and keeps the rates under check," Alok Singh, treasury head at CSB Bank said.