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The Economic Times

Economy / The Economic Times

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FCNR rush leaves banks swimming in 6.65 lakh crore liquidity

Banking system liquidity has reached a four-year high as FCNR(B) inflows entered the market. This excess liquidity has pushed the weighted average call rate significantly below the repo rate. Much of this money is being parked in the RBI's variable rate reverse repo operations. Treasury heads are showing a preference for shorter tenures in these operations. Experts expect liquidity to normalize to a lower level by December.

2 Sep 2026 1:30 am