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Informist, Friday, Jun. 5, 2026 

 

--RBI Malhotra: Proactively undertook durable, transient liquidity steps 

--RBI Malhotra: Drawdown of govt cash, return of FX to aid banking liquidity 

--RBI Malhotra: Weighted avg call rate remained within LAF corridor 

--RBI Malhotra: To maintain apt liquidity in banking system for econ needs 

--RBI Malhotra: Concessional FX swap to be provided for 4 mos 

 

MUMBAI – Liquidity conditions in the banking system remain comfortable and will be actively managed to support the needs of the economy, Reserve Bank of India Governor Sanjay Malhotra said on Friday. Liquidity in the banking system has remained comfortable, with system liquidity, as measured by the net position under the liquidity adjustment facility, at an average daily surplus of INR 2.63 trillion since the Monetary Policy Committee's last meeting, Malhotra said. 

 

To further support liquidity, the central bank announced a concessional foreign exchange swap facility. "A facility of concessional forex swap will be provided till 30th September 2026 to incentivise ECBs (external commercial borrowings) by PSUs (public sector undertaking)," Malhotra said. 

 

He said liquidity conditions have been actively managed by the central bank through a mix of durable and transient measures. "...proactively undertook durable and transient liquidity measures to ensure appropriate liquidity in the banking system." Liquidity is expected to remain supported by evolving factors, including government spending. "Drawdown of government cash balances after the RBI's surplus transfer and the return of currency during the monsoon season will aid banking system liquidity in the nearterm," Malhotra said. 

 

"The Reserve Bank would ensure appropriate liquidity in the banking system to meet the productive requirements of the economy," he said, adding that money market conditions have remained stable. "Since the April meeting, the weighted average call rate traded within the policy corridor," the governor said. 

 

On Friday, the Monetary Policy Committee decided to keep key policy rates unchanged, with the repo rate at 5.25%. Accordingly, the standing deposit facility rate remains 5.00%, while the marginal standing facility rate and bank rate are unchanged at 5.50%. 

 

The central bank has conducted 10 variable rate repo auctions in less than a month and infused transient liquidity of INR 3.70 trillion. All of it has already been reversed.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shumaila Firoz 

Edited by Avishek Dutta

 

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