Liquidity Deficit News
Markets pin hope on RBI as rupee defence, festive flush strain liquidity
RBI's actions are needed as benefits from the cut in cash reserve ratio—the percentage of a bank’s total deposits that must be kept with the RBI in cash—earlier this year, with two tranches of ₹62,500 crore each released already, have largely been offset by heavy outflows of rupee liquidity.
4 min read27 Oct 2025Should Indian stock market investors be worried about the IPO boom? Explained
Till July 2025, 163 public offerings have hit the market, looking to raise ₹67,000 crore, according to Prime Database. In August, too, there is no slowdown in the number of offerings, with many big names like JSW Cement, having accessed the IPO market and a few more lined up.
3 min read13 Aug 2025RBI sees tepid demand for VRR auctions as system liquidity crunch eases
The deficit in India's banking system liquidity has fallen from a peak of over ₹2 trillion in January to about ₹20,000 crore now after RBI took multiple measures to inject cash.
4 min read7 Mar 2025RBI’s FX swap auction sees strong demand as system liquidity deficit persists
RBI's recent $10 billion dollar/rupee swap auction highlighted strong demand amid significant liquidity deficits. With the rupee facing depreciation pressures, experts suggest RBI may need to implement further measures, including long-term swaps, to enhance liquidity in the banking system.
3 min read28 Feb 2025Banks seek more measures to support lending rate cuts
Despite RBI’s measures, liquidity has stayed in deficit since mid-December. After peaking at ₹3.3 trillion on 23 January, deficit cooled to ₹2.1 trillion as on 20 February, Bloomberg data showed.
4 min read24 Feb 2025Indian banks’ liquidity crunch is partly RBI’s own doing
The central bank is trying to address a market problem in which it played a significant role. The lesson is that prudential norms for banks—like their liquidity coverage ratio—should be calibrated to suit our own specific conditions.
3 min read31 Jan 2025Mint Explainer: Understanding how RBI's measures will boost liquidity by ₹1.5 trillion, lead to rate cut
RBI has announced measures to inject ₹1.5 trillion into the economy through government securities purchases, variable rate repo auctions, and dollar-rupee swaps to improve liquidity. However, the liquidity gap remains significant, and an interest rate cut may be based on economic assessments.
3 min read28 Jan 2025Popular Topics
Budget
The Union Budget contains details about the estimated receipts and the expenditure of the government for a particular fiscal year. The Budget is allotted for the upcoming fiscal year, which runs from 1st April to 31st March of the next year. Here is a quick guide on how the Union Budget is prepared