RBI flags liquidity tightness as government cash balances rise

RBI highlighted ongoing liquidity stress as government balances rose, prompting more repo operations even as markets anticipate early-2026 policy easing.

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RBI flags liquidity tightness as government cash balances rise

RBI flags liquidity tightness as government cash balances rise
Fresh RBI data showed liquidity conditions remaining stretched as government cash balances expanded sharply ahead of key debt repayments. The central bank continued variable rate repo operations to manage short term volatility while banks increased overnight borrowing. Analysts noted that treasury yields stayed firm despite expectations of policy easing in early 2026, reflecting tight banking system liquidity and cautious sentiment around global rate cycles. 
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  • RBI
  • liquidity