RBI liquidity measures may soon reduce lending rates

economictimes.indiatimes.com

The Reserve Bank of India (RBI) is implementing measures to increase liquidity, which may lead to lower short-term borrowing costs for banks as soon as next month. This includes reducing rates on certificates of deposit and commercial paper. The RBI has infused ₹4.1 lakh crore into the market and plans additional liquidity measures, potentially shifting the banking system into surplus. This change is expected to lower lending rates earlier than previously thought. Current interbank call rates have fluctuated, with the weighted average call rate dropping from 6.81% in January to 6.21% in March. The RBI's actions aim to ease financing conditions amid economic challenges.


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