Lenders Clamour for Durable Liquidity Infusion from RBI

Indian lenders have asked the central bank to infuse durable liquidity into the banking system in the wake of the significant dip in a key measure of liquidity, six treasury officials said.

- Reuters

MUMBAI:

A select set of market participants met Reserve Bank of India officials late on Thursday, raising concerns over the persistent tightness in liquidity conditions.

The tightness in liquidity, if sustained, is likely to keep borrowing rates of banks high, potentially impacting lending rates at a time when India's economic growth is cooling down.

"Suggestions like longer term variable rate repos, FX swaps and open market purchases of bonds were made," said one of the officials who was a part of the meeting.