The Reserve Bank of India will infuse an additional Rs 10,000 crore into the system on Friday to ease the tight liquidity situation,ahead of commencement of advance tax payments.
As the liquidity conditions are expected to tighten on account of advance tax payments commencing from mid-December 2013,Reserve Bank of India has decided to provide additional liquidity of Rs 10,000 crore through the 14-day term repo scheduled to be conducted on December 13,2013, the Reserve Bank of India said in a release.
The Reserve Bank of India said it has been closely monitoring liquidity conditions so as to ensure that adequate liquidity is available to support flow of credit to productive sectors of the economy. Accordingly,the notified amount for the 14-day term repo auction to be conducted on December 13,2013,will be adjusted upwards by Rs 10,000 crore,it added.
RBI Governor Raghuram Rajan recently said the central bank will take steps to improve liquidity situation,especially in the government securities (G-Sec) market.
In the coming weeks,we will roll out more recommendations of the Gandhi Committee report to improve the liquidity and depth of the G-Sec market. We will then turn to money markets and corporate debt markets. We will introduce new variants of interest rate futures and products like inflation indexed certificates,and work to improve liquidity in derivative markets, the Reserve Bank of India Governor had said.