Reserve Bank of India's (RBI) six-member Monetary Policy Committee (MPC) agreed to keep the repo rate unchanged at 4 percent, even as Russia's invasion of Ukraine boosted inflation and the downside risk to growth.
RBI governor Shaktikant Das said the central bank began the journey of fighting COVD impact on the economy two years ago and has "successfully navigated course through turbulent waters".
He said that during the pandemic, the Reserve Bank offered liquidity facilities of the order of Rs 17.2 lakh crore of which Rs 11.9 lakh crore was utilised.
"So far Rs 5 lakh crore has been returned or withdrawn on the lapse of various facilities on their due dates. The extraordinary liquidity measures undertaken in the wake of the pandemic combined with liquidity injected through various other operations of the Reserve Bank have left a liquidity overhang in the order of about Rs 8.5 lakh crore in the system," he added.
Also Read:
The RBI will engage in gradual calibrated withdrawal of this liquidity over a multi-year timeframe in a non-disruptive manner beginning this year, Das added.
The objective is to restore the size of the liquidity surplus in the system to a level consistent with the prevailing stance of monetary policy.
"While doing so, I would like to reiterate our commitment to ensure the availability of adequate liquidity to meet the productive requirements of the economy. We also remain focused on the completion of the borrowing programme of the government and towards this end, the Reserve Bank will deploy various instruments as warranted," Das said.
The RBI has implemented a 3.75 percent Standing Deposit Facility (SDF) as part of its liquidity management strategy. The RBI has reinstated the Liquidity Adjustment Facility (LAF) corridor by establishing SDF, with SDF at 3.75 percent and Marginal Standing Facility (MSF) at 4.25 percent.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM
Wine shops and bars to remain shut for 4 days in Mumbai in 4 weeks, check details
May 15, 2024 7:52 PM
INDIA bloc will win majority seats in Bihar, says Tejashwi Yadav
May 15, 2024 4:20 PM