RBI to renew regular liquidity administration operations in phased method

Image Source : PTI RBI to renew regular liquidity administration operations in phased method
The RBI on Friday mentioned it has determined to revive regular liquidity administration operations in a phased method and can conduct variable charge reverse repo public sale of Rs 2 lakh crore on January 15. In February final 12 months, RBI had introduced a revised Liquidity Management Framework (LMF) that was simplified and “clearly communicated” the targets and toolkit for liquidity administration.
However, in view of the COVID-19 outbreak, the quickly evolving monetary situations and considering the impression of disruptions because of the lockdown, RBI had determined to briefly droop the revised LMF and the window for Fixed Rate Reverse Repo and Marginal Standing Facility (MSF) operations had been made accessible all through the day.
This was supposed to offer eligible market contributors with better flexibility of their liquidity administration.
“On a review of evolving liquidity and financial conditions, it has been decided to restore normal liquidity management operations in a phased manner,” RBI mentioned.

Accordingly, it can conduct a Variable Rate Reverse Repo public sale on January 15, 2021 beneath the revised LMF issued on February 6, 2020. The notified quantity is Rs 2,00,000 crore, it mentioned.
RBI additional mentioned the Fixed Rate Reverse Repo and MSF operations will proceed to be accessible all through the day.
“As stated in the last MPC (Monetary Policy Committee) statement on December 4, 2020, it is reiterated that the Reserve Bank will ensure availability of ample liquidity in the system,” the central financial institution added.
In view of operational dislocations and elevated stage of well being dangers posed by COVID-19, RBI had additionally determined to truncate buying and selling hours for varied market segments with impact from April 07, 2020.
Later, with the graded easing of lockdown restrictions, it was determined to revive buying and selling hours for markets regulated by the Reserve Bank in a phased method with impact from November 9, 2020.
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