RBI's liquidity infusion largest since April 2019 as surplus cash dries up

Lack of repo suggests RBI tolerance of higher money mkt rates: Analysts

The Reserve Bank of India (RBI) on October 21 injected the largest amount of funds into the banking system in three and a half years, indicating that surplus cash with banks is drying up at an accelerated pace.

The RBI last Friday injected liquidity worth Rs 72,860.70 crore — the highest since April 30, 2019. Three days later, on October 24, the central bank injected Rs 62,835.70 crore, the RBI data showed. An injection of funds implies tight liquidity in the banking system, whereas if the RBI absorbs money, it implies surplus cash with banks.

The abrupt tightening of liquidity