Some outflows because of service tax could have resulted in borrowings going up but liquidity is currently manageable, said the treasury head of a large private bank.
Repo borrowings of banks totalled R1,16,980 crore on Thursday, sharply up from R57,615 crore on Wednesday.
Dealers said that with the cash reserve ratio cut by 25 basis points taking effect on February 9, the repo borrowings could fall. The CRR cut will infuse R18,000 crore into banks.
Some dealers said additional stress on liquidity was also due to the NTPC share issue. NTPC issue was oversubscribed 1.7 times and garnered over R35,000 crore in subscription. The government looks to offload 9.5% stake in the company through the issue.
There has been some mismatch due to the share sale also which will even out eventually, said a dealer at a public sector bank.
In offer for sale, bidders have to keep 100% of their order value in their account while bidding. Once the allocation of the shares concludes, unsuccessful bidders are refunded their money.
Money market rates remained near the repo rate of 7.75% indicating liquidity stress was not intense. Call money rate moved in 7.75-7.85% band.