With liquidity deficit being way above its comfort level, the Reserve Bank today announced that it will reintroduce a second LAF window to inject cash into the system. The RBI operates liquidity adjustment facility (LAF) to help banks manage their liquidity position. The central bank said it will have a second LAF repo every Friday between 1630 and 1700 hours. At present, RBI operates the repo (injection) and reverse repo (absorption) auctions twice a day at 0930-1030 hours and 1630-1700 hours, respectively. The second LAF repo has been reintroduced in response to suggestions from market participants and provide flexibility to market participants in their liquidity management, the RBI notification addressed to all commercial banks said.
Source: Economic Times
No comments:
Post a Comment