The Reserve Bank of India (RBI) will actively manage liquidity as per the monetary policy stance and take action as necessary, Governor Shaktikanta Das said.
“Liquidity in the last two or three weeks went into the deficit mode mainly because of advance tax and GST payments in September. Advance tax was in the middle of September and GST around 20th. Overall, the liquidity is surplus,” Das said at the post-Monetary Policy press conference.
Stating that liquidity management was as per monetary policy stance and was not about global bond yields, Das said open market operations would be undertaken as necessary. OMOs are part of domestic liquidity management, he said.
“Going forward, RBI may have to look at open market sales of government securities to manage liquidity consistent with the stance of monetary policy,” he added.
Das said banks have got back Rs 3.43 lakh crore worth of Rs 2,000 notes and only Rs 12,000 crore were left.
“About 87% is bank deposits, rest is exchange of cash. There is substantial liquidity due to the withdrawal of Rs 2,000 notes,” he said.
He said that government spending is also picking up, which will also add a lot of liquidity. In the festive season, currency in circulation will go up which will drain out some liquidity but the overall liquidity remains surplus.
“Moderation in system liquidity has led to greater recourse of MSF by banks. There is also skewed liquidity distribution among banks. It is a turning pitch and we will play our shots accordingly,” he said.
