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Informist, Wednesday, Aug. 5, 2026

 

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--RBI Malhotra: Govt spend, RBI steps to aid liquidity in near-term
--RBI Malhotra: Short-term money mkt rates such as CPs fell in Jul 
--RBI Malhotra: Measures to attract inflows to aid banking liquidity near term 
--RBI Malhotra: To use 2-way ops to ensure sufficient liquidity 
--RBI Malhotra: Will ensure sufficient liquidity in banking system 
--RBI Malhotra: To align weighted avg call rate to policy repo rate 
--RBI Malhotra: Aim to align weighted avg call rate to policy repo rate

 

MUMBAI – The Reserve Bank of India will proactively ensure sufficient liquidity in the banking through its two-way operations, Governor Sanjay Malhotra said Wednesday in his address at the conclusion of the Monetary Policy Committee's third bi-monthly meeting for 2026-27 (Apr-Mar). The central bank is guided by the objective of aligning the weighted average call rate to the policy repo rate, Malhotra said.  

 

"System liquidity, as measured by the net position under the LAF (liquidity adjustment facility), stood at an average daily surplus of 1.0 lakh crore (INR 1 trillion) since the last MPC meeting in June 2026," Malhotra said. Going forward, the governor expects the usual return of currency during the monsoon, drawdown of government cash balances, and the central bank's special measures to attract capital inflows are expected to aid banking system liquidity.

 

The banking system liquidity since Friday rose to the highest level since Apr. 20 on the back of foreign currency non-resident bank deposit flows. The net liquidity absorbed by the RBI--a proxy for liquidity surplus--was at INR 3.34 trillion Tuesday, sharply up from INR 2.44 trillion Monday. Outstanding FCNR(B) deposits rose by $28 billion between Jun. 5 and Thursday to $60.55 billion, according to a written reply by Minister of State for Finance Pankaj Chaudhary in the Lok Sabha.    

 

The governor said since the last policy, which was on Jun. 5, the weighted average call rate traded within the liquidity adjustment facility corridor averaging at 5.31%. "Short-term money market rates, especially rates of commercial papers and certificates of deposit, moderated in July," Malhotra said.  End

 

Reported by J. Navya Sruthi

Edited by Deepshikha Bhardwaj

 

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