2 days ago
- Business
- Business Standard
How much liquidity does RBI want: Appropriate, adequate, or abundant?
Liquidity in the system had a deficit of Rs 2.4 trillion towards the end of the last financial year (on March 23); it is now in surplus of around Rs 3 trillion
Tamal Bandyopadhyay
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Water, water, everywhere,
Nor any drop to drink.
These two lines from Samuel Taylor Coleridge's poem, The Rime of the Ancient Mariner, summed up sailors' plight: they are dying of thirst despite being in the middle of the ocean since all around them is the undrinkable saltwater.
These days, if you sneak into the cabins of senior bankers managing liabilities, you'd find them facing a similar situation, with one difference – in place of water is money. The system is slush with money but the pile of low-cost savings and current accounts is depleting every quarter. There is no cheap money