RBI Liquidity Surge: Banks Hoard ₹7.37 Trillion as Rupee Dips to 89.84 Amid Refinance Boost

Liquidity Snapshot

Reserve Bank of India reported robust cash positions for scheduled commercial banks at ₹7.37 trillion on December 30, reflecting steady liquidity absorption ahead of the New Year holiday. Refinance facilities disbursed ₹107.88 billion, while Marginal Standing Facility (MSF) borrowings hit ₹12.03 billion, underscoring banks' reliance on overnight funding amid expiry pressures.

Key Highlights

Cash Balances: Peaked at ₹7.37 trillion, up from recent levels, driven by year end inflows and RBI's proactive measures.

Refinance Operations: RBI injected ₹107.88 billion on Dec 30, supporting sectoral lending amid festive slowdown.

MSF Borrowings: Banks tapped ₹12.03 billion via MSF, the penalty window for excess SLR shortfalls, indicating tight intra-day management.

Rupee Movement: INR opened at 89.84/USD (-0.06%), pressured by dollar strength and low holiday volumes; previous close 89.79.

Market Implications
Ample reserves signal stability for Monday's trading, potentially easing interbank rates. Watch for Q4 credit data as RBI navigates inflation and growth.

Sources: RBI Official Data, Reuters