Breaking News

You are here » Indian-Commodity  :  Economy  :  RBI will continue to inject liquidity into system via OMO till March-end: Viral Acharya

07-Dec2018

RBI will continue to inject liquidity into system via OMO till March-end: Viral Acharya

Amid liquidity crunch in the financial system, the Reserve Bank of India's (RBI) deputy governor Viral Acharya has said that the Central Bank will continue to inject liquidity into the banking system through open market operation (OMO) purchases till the end of this fiscal (FY19). The RBI has conducted OMO purchases to the tune of Rs 1.36 trillion in the current financial year, with over Rs 1 trillion of the infusion in the last three months.

Acharya said 'We expect that this increased frequency and quantum of OMO purchases may be required until end of March, but the exact calibration will depend on sustained changes in the behaviour of currency in circulation and the magnitude of sterilisation for RBI's forex operation, which keeps evolving with external sector conditions'. He further said RBI has also provided infusion of liberal liquidity through term repo in addition to the usual provision via the liquidity adjustment facility (LAF).

On the liquidity crisis faced by the non-banking finance companies (NBFCs) and housing finance companies (HFCs), he said RBI has been watching the market developments closely since the end of August. He said 'We have been in regular touch with the Securities and Exchange Board of India to assess the fallout in terms of mutual fund redemptions and the resulting roll-over risks for NBFCs and HFCs'. Besides, in order to meet liquidity needs, the Central Bank recently had announced that it would conduct purchases of government securities under OMO for an amount of Rs 40,000 crore in December.


Related News

View all news

CPI inflation hits 6-month high of 2.92% in April

India's retail inflation based on Consumer Price Index (CPI) continued northward journey for third straight month and inched up to a 6-month high of 2.92% in April 2019 due to a spike in food prices, including......

Indian economy to grow at 7% range in current fiscal: Subramanian

Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian has said  that the Indian economy would grow at 7% range in the current financial year (FY20) powered by the effects of the strong structural......

Banks take 57% haircut in 94 cases resolved in FY19: ASSOCHAM-CRISIL study

A joint study carried out by the industry body Associated Chambers of Commerce & Industry of India (ASSOCHAM) and rating agency CRISIL stated that banks have taken a huge 57% haircut in the 94......

Top News

View all news

SRF, NIIT Technologies and United Bank of India to see some action today

SRF has entered into a definitive agreement to sell its Engineering Plastics Business to DSM, the Life Sciences and Materials Sciences Company in an all-cash transaction, amounting to Rs 320 crore. The......

NIIT Technologies concludes sale of 88.99% stake in ESRI India Technologies

NIIT Technologies has concluded the sale of 88.99% equity shares in ESRI India Technologies, India to Environment Systems Research Institute Inc., USA. Consequent to above sale, ESRI India Technologies,......

United Bank of India to raise Rs 1,500 crore by various means

United Bank of India has received approval to raise equity capital not exceeding Rs 1,500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue,......