Rupee Opens Lower as RBI Data Highlights Banking Liquidity Trends

Market Update – Currency & Liquidity Snapshot

India’s currency and liquidity indicators reflected a cautious start to the week. The rupee weakened slightly against the US dollar, while central bank data revealed significant cash balances held by banks. The absence of government surplus cash auctions and modest borrowing under the Marginal Standing Facility (MSF) highlighted a balanced liquidity environment.

Key Highlights:

• Indian Rupee (INR): Opened at 90.5150 per USD, down 0.1% from the previous close of 90.4350.
• Banks’ Cash Balances: Reported at ₹7.79 trillion on February 4, according to RBI.
• Government Surplus Cash Auction: Nil as of February 4, reflecting no excess liquidity parked with RBI.
• Refinance Operations: RBI reported ₹90.45 billion in refinancing on February 4.
• MSF Borrowing: Indian banks borrowed ₹7.86 billion via the Marginal Standing Facility.

Analysis:
The rupee’s marginal decline signals cautious sentiment amid global currency pressures. Strong cash balances suggest adequate liquidity in the banking system, while limited MSF borrowing indicates stability. The absence of government surplus cash auctions further underscores balanced fiscal positioning.

Sources: Reuters (RTRS), Reserve Bank of India (RBI)