RBI expects liquidity surplus to be drained by end of current fiscal year

The Reserve Bank of India's Governor indicated that the current surplus liquidity in the banking system is expected to be absorbed during the remainder of the financial year. He stressed that increasing the cash reserve ratio (CRR) would be among the least favoured tools for draining excess liquidity from the system.

The RBI typically manages liquidity through various instruments including open market operations and adjustments to reserve requirements. The Governor's remarks suggest the central bank is monitoring liquidity conditions closely and may employ alternative measures to balance the money supply.