The Reserve Bank of India (RBI) said that it expects the tight money supply condition, created by the huge outgo towards payment on spectrum by telcos, to ease by next week.
RBI's statement came a day after the central bank decided to refrain from sucking out liquidity from the system, even as it took other steps to rein in high inflation.
Reserve Bank had refrained from raising the cash reserve ratio (CRR), a requirement for banks to keep cash with the central bank, as the liquidity is already tight in the system.
This was done despite the RBI raising concerns over high inflation and upping its key short-term rates.
The system faced shortage of money supply after over Rs 1 lakh crore went out of the system as telcos made payments towards acquiring spectrum for high-speed telecom and broadband services and corporates made advance tax payments.
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