Indian banking system's liquidity surplus rises to Rs2 trillion

4 Aug 2022 , 07:59 AM

After falling to a nearly three-year low below 500 billion rupees ($6.34 billion) last week, India’s banking sector liquidity surplus increased to more than 2 trillion rupees on Wednesday. According to merchants, the government’s month-end expenditure helped the surplus increase more than four times to 2.02 trillion rupees from the previous week.

With the month-end inflows, the situation is much better currently, according to a trader with a private bank. The overnight triparty repo dealing system, or TREPS, was at 4.52 % at 06:40 GMT, unchanged from its previous closing, while the one-day interbank call money rate was 4.80 % at 06:40 GMT.

“The next batch of outflows would be the non-Goods and Services Tax payments that would move out from the system later in the week,” said a trader from a private bank. “Surplus should remain over 1 trillion rupees in the short term.”