Financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates, according to a research report by CRISIL Market Intelligence and Analytics. The report released during the month also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions.
RBI has been keeping liquidity tight in the banking system in tune with the “withdrawal of accommodation” monetary policy stance to ensure that inflation progressively aligns with the target while supporting growth.
China s glut, India s drought; Two faces of liquidity deccanherald.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from deccanherald.com Daily Mail and Mail on Sunday newspapers.
The RBI has been maintaining tight liquidity to curb inflation, a politically sensitive metric that needs restraining, especially as the most populous country embarks on the biggest democratic exercise in the world to choose its government for the next five years.