India's central banker warns against the falling money market ordinary

Mumbai, – India’s call money market faces the risks of falling liquidity, which poses challenges for monetary policy transfer, the country’s central bank chief said in a speech published on Saturday. Reserve Bank of India, Governor Sanjay Malhotra, expressed concern about “asymmetrys arising on opportunities between different money market rates – the rate at which RBI provides liquidity, the money rate, the market recovery rate and treps rate”. Banks – the entities with only access to the RBI’s liquidity facilities, the call fee market and the Repo markets – must be proactive in ensuring that the central bank’s liquidity measures are “immediately and seamlessly” transferred to the broader market, Malhotra said at a conference in India on Saturday. The call fee is an over -agent rate at which banks and other financial institutions borrow and borrow and borrow. If the RBI reduces interest rates or injecting liquidity, it can reduce the money rate of the call, which transmits the policy of the central bank to the system. Surplus liquidity in India this month had an average of 1.7 trillion rupes per day, which reversed a four-month deficit, as the RBI strengthened its liquidity infusions to support growth. The governor also asked that the Indian government’s security market deepen and improve the liquidity and prices by increasing the participation of various stakeholders. There is also a need for more proactive management of risks by various stakeholders in the derivative market, increasing the depth of the market, increasing the variety of views and promotes greater competition and efficiency, he said. This article was generated from an automated news agency feed without edits to text. First published: 19 Apr 2025, 1:23 pm Ist