Govt to raise Rs 80,000 cr via cash mgt bills to meet liquidity mismatch

Issuance of CMB may mean liquidity available with govt won't be enough, especially after stimulus packages, and in the face of a falling revenue collection due to the nationwide slowdown

The government will on Thursday borrow Rs 80,000 crore through 84-day cash management bills (CMB), or short-term treasury bills, used to meet temporary liquidity mismatches.

Cash management bills are off-budget items and are not in use frequently unless the government needs some interim cash. One side-effect of the CMBs is it reduces excess systemic liquidity for the tenure of the bill. The excess system liquidity, as of Monday, was at Rs 7.29 trillion. The banks are not lending out their money, and so, the liquidity is getting parked with the RBI earning just the reverse repo rate. The central