Money market funds gain the most in 11 quarters

India Infoline News Service | Mumbai |

The money market funds grew on account of heavy inflows following a reversal of liquidity tightening measures by the RBI once the exchange rate volatility eased

Assets of money market funds grew 35% to Rs. 602 bn in the December 2013 quarter -- marking the highest rise since the March 2011 quarter – to Rs 2.31 trillion, according to CRISIL Research's note on mutual fund quarterly average AUM numbers released by AMFI for October-December 2013.

The money market funds grew on account of heavy inflows following a reversal of liquidity tightening measures by the RBI once the exchange rate volatility eased. The central bank had tightened liquidity in the banking system in July-August to curb the sharp depreciation of the rupee against the dollar.

Liquidity in the banking system also improved due to gilt purchases via open market operations (OMOs) and additional repo auction facility extended by the RBI.
 

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