The banking system has excess liquidity even after adjusting cash holdings. Governor of RBI

The banking system has excess liquidity even after adjusting cash holdings. Governor of RBI

The banking system has excess liquidity even after adjusting cash holdings. Governor of RBI

The repo rate was left at 6.50 percent in the February monetary policy by the RBI.

Governor of the Reserve Bank of India (RBI), Shaktikanta Das, said on February 8 that after changes to government cash holdings, there was excess liquidity in the banking sector.

After a 4.5-year lapse, systemic liquidity swung into a deficit in September 2023. However, potential liquidity in the banking sector is still in excess after adjustments to government cash holdings, Das said at the monetary policy announcement.

By February 7, the banking sector is expected to have a liquidity deficit of around Rs 1.53 lakh crore. However, as of January 12, Bloomberg data indicates that the government's cash position was around Rs 3.59 lakh crore.

The repo rate was left at 6.50 percent in the February monetary policy by the RBI.