Reserve Bank of India (RBI) continues to purchase government bonds through the open market operation (OMO) in order to ease liquidity constraint in the banking system. This was hinted by Economic Affairs Secretary Arvind Mayaram when he said the government doesn't think the central bank has slowed the pace of its bond purchase programme
Tag: OMO
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Liquidity may remain in deficit mode in banking system
Liquidity in the banking system is expected to remain in deficit mode because of factors like currency leakage from the system, high government cash balance with Reserve Bank of India (RBI), experts said. According to some economists, the banking system may face liquidity deficit to the tune of Rs 1.5 trillion till September 2013 compared to Rs 1 trillion at the end of Marc
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Some bankers expect RBI to cut CRR to ease liquidity strain
Some bankers expect Reserve Bank of India either to cut cash reserve ratio (CRR) in the third-quarter monetary-policy review on January 29 or conduct open market operations (OMO) to overcome liquidity crunch in the banking system. It is learnt that slow growth in deposit rate, back-to-back auction of government bonds have strained liquidity in the banking system. According to reports, main