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RBI鈥檚 Liquidity Boost To Push Banks To Pass-on 100 bps Rate Cuts In 2025: Fitch
New Delhi, Jul 16 (KNN) Global rating agency Fitch Ratings stated on Wednesday that the Reserve Bank of India's substantial liquidity infusions into the banking system since early 2025, combined with its commitment to maintain adequate liquidity, will support the transmission of 100 basis points in rate cuts during 2025.
The RBI has injected approximately Rs 5.6 lakh crore, equivalent to 2 percent of system assets, through government securities purchases in 2025.
This durable funding injection has resulted in surplus system liquidity since March, according to Fitch's analysis.
The central bank's decision to reduce the cash reserve ratio by 100 basis points will release an additional Rs 2.7 lakh crore in liquidity through a phased implementation approach.
Fitch noted that these substantial liquidity infusions since January 2025, along with the RBI's commitment to provide sufficient liquidity going for