RBI Chief Sees India Bank Liquidity Surplus Ebbing
Reserve Bank of India Governor Sanjay Malhotra expects the recent banking liquidity surplus to decline by the financial year end. The central bank raised its benchmark repo rate by 25 basis points to combat inflation risks.
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India's banking liquidity surplus will fade by the financial year-end as the central bank absorbs funds through various operations. The surplus has averaged 7.3 trillion rupees ($75.49 billion) since September, driven by $144 billion in dollar inflows. This excess liquidity risks stoking inflation and blunting the impact of recent interest rate hikes.
