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RBI Injects Rs 1 Lakh Crore Amid Festive Rush
20 Oct
Summary
- RBI operationalized its first liquidity infusion in three months.
- Overnight call rates surged past the policy benchmark rate.
- The infusion aims to manage funds during the festive season.
The Reserve Bank of India has operationalized its first liquidity infusion program in three months, injecting Rs 1 lakh crore into the system. This move comes as overnight call rates surged past the policy benchmark rate of 5.50%, reaching 5.67%.
The central bank's variable rate repo auction attracted bids totaling Rs 1.50 lakh crore. This liquidity support is timely for banks managing funds amid monthly tax outflows and a tightening daily cash reserve requirement, which took effect on October 16, 2026.
Experts note that maintaining the overnight rate near the repo rate is crucial for liquidity management, irrespective of the monetary policy stance. The call rate had approached the Marginal Standing Facility (MSF) rate, indicating tight liquidity conditions that the RBI is now addressing.
