System liquidity moderated in latter half of October on build-up in government cash balances

According to Reserve Bank of India (RBI), system liquidity moderated in the latter half of October with the build-up in government cash balances on account of higher GST collections 18 and festival related expansion in currency in circulation. Government spending eased liquidity conditions in early November. Overall, system liquidity remained in surplus during the second half of October and early November, with the average daily net absorption under the liquidity adjustment facility (LAF) increasing to Rs 1.72 lakh crore during October 16 to November 18, 2024 from Rs 1.14 lakh crore during September 16 to October 15, 2024.