On Friday, the weighted average rate on tri-party repos closed at 6.32%, almost 20 basis points lower than the RBI s repo rate of 6.5%, Clearing Corporation of India (CCIL) data showed. In theory, overnight rates are supposed to be closely aligned with the repo rate, which is the rate at which the RBI lends to banks.
Transmission may improve in the coming months as the share of EBLR increases in banks’ portfolios. Also, liquidity has been progressively tightened in the past six months by the RBI
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