Liquidity blues prompt govt to borrow Rs 3k cr less for now

Written by fe Bureaus | Mumbai | Updated: Jun 29 2010, 05:46am hrs
The government on Monday cut back its immediate market borrowing by Rs 3,000 crore, citing liquidity concerns. This is the first time this fiscal that the finance ministry has settled for a borrowing below its scheduled mop-up.

While the ministry said it will raise the amount during the remaining period of the issuance calendar, the reduced borrowing will ease the pressure on banks' cash positions for now. On Monday, banks borrowed Rs 62,940 crore from RBI's special repo window, slightly below Friday's Rs 75,110 crore. Throughout June, banks have borrowed heavily to meet cash requirements after 3G auctions, advance tax payments and government borrowing sucked out over Rs 1,35,000 crore from the banking system.