{"id":207607,"date":"2022-09-24T19:31:52","date_gmt":"2022-09-24T14:01:52","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=207607"},"modified":"2022-09-24T19:31:52","modified_gmt":"2022-09-24T14:01:52","slug":"what-banking-system-liquidity-going-into-deficit-mode-means","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/what-banking-system-liquidity-going-into-deficit-mode-means\/","title":{"rendered":"What banking system liquidity going into \u2018deficit mode\u2019 means"},"content":{"rendered":"\n<p><b>Source: <\/b><span style=\"font-weight: 400;\">The post is based on the article<\/span><b> \u201cWhat banking system liquidity going into \u2018deficit mode\u2019 means\u201d <\/b><span style=\"font-weight: 400;\">published in <\/span><b>Indian Express <\/b>on<b> 24th September 2022<\/b><\/p>\n<h5><b>What is the News?<\/b><\/h5>\n<p><span style=\"font-weight: 400;\">For the first time since May 2019, the Banking System Liquidity situation turned into a deficit mode.<\/span><\/p>\n<h5><b>What is banking system liquidity?<\/b><\/h5>\n<p><span style=\"font-weight: 400;\">Liquidity in the banking system refers to readily available cash that banks need to meet short-term business and financial needs.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On a given day, if the banking system is a net borrower from the RBI under Liquidity Adjustment Facility(LAF), the system liquidity can be said to be in deficit and if the banking system is a net lender to the RBI, the system liquidity can be said to be in surplus.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The LAF refers to the RBI\u2019s operations through which it injects or absorbs liquidity into or from the banking system.<\/span><\/p>\n<h5><b>What has triggered this deficit?<\/b><\/h5>\n<p><span style=\"font-weight: 400;\">There are two main reasons for this deficit: recent advance tax outflow and continuous intervention of the RBI to stem the fall in the rupee against the US dollar.<\/span><\/p>\n<h5><b>What will be the impact of this deficit on consumers?<\/b><\/h5>\n<p><span style=\"font-weight: 400;\">A tight liquidity condition could lead to a rise in the government securities yields and subsequently lead to a rise in interest rates for consumers too.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: The post is based on the article \u201cWhat banking system liquidity going into \u2018deficit mode\u2019 means\u201d published in Indian Express on 24th September 2022 What is the News? For the first time since May 2019, the Banking System Liquidity situation turned into a deficit mode. What is banking system liquidity? Liquidity in the banking&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/what-banking-system-liquidity-going-into-deficit-mode-means\/\">Continue reading <span class=\"screen-reader-text\">What banking system liquidity going into \u2018deficit mode\u2019 means<\/span><\/a><\/p>\n","protected":false},"author":10317,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[10500],"class_list":["post-207607","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700782359,"cached_date":1704922105},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/207607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10317"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=207607"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/207607\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=207607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=207607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=207607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}