If we go by the Wednesday’s liquidity numbers, we can witness skewed distribution of liquidity once again.
Since 11th Sept (Post 1st tranche of ICRR reversal), MSF Borrowing increased significantly from ₹13,953Cr to ₹1.97 lacs Crs but at the same time, SDF Volume also increased from ₹52,143Cr to ₹85,868Cr for the same period.
Higher Borrowings can be understood as a result of statutory tax outflows (advance taxes/GST) and increase in SDF Volume can be attributed to the effect of 50% reversal of ICRR. Hence, we can see such skewed distribution of liquidity among banks as few have been benefited out of 50% of I-CRR reversal and few have been the victim of significant outflows which could not be supported by ICRR reversal.
It indicates that next week, we may see liquidity easing and being evened out as there is a final reversal of 50% ICRR at one go on 7th Oct’23. Further, we have seen inflows coming in post GST outflows, which is delayed this time due to various reasons, including RBI’s intervention on account of significant rise of DXY as due to that rupee weakened and went beyond 83.20 level.
