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Chart of the Day | The roots of the liquidity deficit run deeper

There has been no growth in reserve money this fiscal

September 23, 2022 / 10:26 AM IST
Chart of the Day | The roots of the liquidity deficit run deeper

Cast your eyes on the accompanying table. It shows that reserve money growth in the current fiscal year till 16th September has been flat, in fact slightly negative. Last fiscal, over the same period, reserve money increased by 3.1 percent. Reserve money is nothing but the central bank’s liabilities---a fall in reserve money therefore indicates a fall in liquidity. (image) One reason why reserve money has not increased is because the RBI has been defending the rupee by selling dollars....

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