Comfortable liquidity reinforced transmission of rate cuts in mkts

Comfortable liquidity maintained by the Reserve Bank of India (RBI) through its interventions has reinforced the transmission of the policy rate cut by the central bank's Monetary Policy Committee (MPC) to the money, bond, and credit markets during the current easing cycle, RBI Governor Sanjay Malhotra said on Wednesday.

- SUBRATA PANDA

He also assured that the RBI will maintain sufficient liquidity in the system to ensure continued smooth transmission to money and credit markets.

System liquidity, as measured by the net position under the liquidity adjustment facility, has been in surplus, averaging ₹3 trillion per day since the last MPC meeting, compared to an average daily surplus of ₹1.6 trillion during the previous two months.

"As the cash reserve ratio cut announced in the last policy comes into effect in a staggered manner beginning September, it will further support liquidity conditions," Malhotra said.