Liquidity to ease on the back of govt spending report, scheduled inflows
Liquidity will improve this week largely on the back of government spending. Government officials have assured the market that it will spend Rs 10,000 crore by the end of the week. This will pump in the much-needed liquidity into the banking system.
Last week was marked by the Reserve Bank of India (RBI) financing the market through the reverse repo route, with average daily inflows of Rs 5,594 crore. There was no inflow of funds in the repo mart last week.
Liquidity has been sucked out of the system following the Rs 14,000-odd crore state government loans