Reserve Bank of India (RBI) today said it is ready to meet additional liquidity requirement next month that may arise due to advance tax payment by corporates.
The additional liquidity requirement would be met through various tools, the RBI said in a statement.
As stated in the Monetary Policy, while the system liquidity is currently in a surplus mode, it is moving steadily towards neutrality, it said.
"With a view to address any additional demand for liquidity on account of increase in currency in circulation and advance tax payments by corporates and to provide flexibility to the banking system in its liquidity management towards March-end, the RBI stands ready to inject adequate additional liquidity...," it said.
This would be through a combination of appropriate instruments, while continuing with its normal Liquidity Adjustment Facility (LAF) operations, the statement said.
"As a special case, standalone Primary Dealers will be allowed to participate along with other eligible participants in the last regular term repo auction of the current financial year, to be conducted on March 28, 2018, within the usual notified amount," it said.
The notified amount would be as announced in the fortnightly press release for Term Repo auctions under the Liquidity Adjustment Facility, it said.
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