RBI may revisit its toolkit to manage liquidity at banks after sudden surge

May 23, 2023

A higher-than-budgeted surplus transfer by the RBI to the government, and the central bank’s move to withdraw ₹2,000 notes from circulation have substantially altered the liquidity landscape for the banking system. Both announcements, made one after the other by the RBI on Friday evening, will result in an improvement in banking system liquidity, albeit in different ways.

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