The Reserve Bank of India had infused total liquidity of Rs 2.98 lakh crore in the market in 2018-19, said one of its reports released on Thursday.
According to the First Bi-monthly Monetary Policy Statement for 2019-20, the systemic liquidity moved into deficit during February 7-March 31 from a daily net average surplus of Rs 27,928 crore during February 1-6, 2019, reflecting the build-up of Centre’s cash balances.
The report further suggested that the Currency in circulation registered a sharp increase in February-March. The liquidity requirements of the system were met via infusion of durable liquidity amounting to Rs 37,500 crore in February and Rs 25,000 crore in March through open market purchase operations (OMOs).
Simultaneously, total durable liquidity injected by the RBI through OMOs aggregated Rs 2,98,500 crore for 2018-19.
Liquidity infused under the LAF (Liquidity Adjustment Facility) on an average daily net basis, was reported at Rs 95,003 crore in February (February 7-28, 2019) and Rs 57,043 crore during March. The weighted average call rate (WACR) remained largely aligned with the policy repo rate in February and March.
Foreseeing the seasonal crunch of liquidity during end-March, the Central Bank conducted four longer-term (tenor ranging between 14-day and 56- day) variable rate repo auctions during the suggested period, in addition to the regular 14-day variable rate term repo auctions.
Further, it organised long-term foreign exchange buy/sell swaps of five billion for three years on March 26, 2019, thereby infusing durable liquidity of Rs 34,561 crore into the system, said the bank’s official communique.
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