RBI to infuse additional Rs 10,000 cr liquidity on Friday

Written by PTI | Mumbai | Updated: Dec 12 2013, 01:45am hrs
The Reserve Bank of India (RBI) today said it 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, RBI has decided to provide additional liquidity of 10,000 crore through the 14-day term repo scheduled to be conducted on December 13, 2013," it said in a release.

RBI said that 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 10,000 crore, it added.

RBI Governor Raguram Rajan during a function in New Delhi today 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 measures. We have rolled out some, such as interest rate futures but we will roll out more measures to improve the liquidity and depth of the G-sec market.

In particular, we need to look at increasing liquidity across the spectrum of bonds that are traded not just for 10-year bonds....We will also strengthen corporate debt market," Rajan said.