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Fitch on RBI Liquidity and a 100 bps Rate Cut in 2025

17 July 20251 min read
ECONOMYFitch on RBILiquidity and a 100bps Rate Cut in202517 July 2025safalsetu.com

Why in the news

Fitch Ratings judged that RBI’s liquidity management supports monetary transmission ahead of a 100 bps rate cut expected in 2025.

Key facts

  • Injection equals 2% of system assets; liquidity has been in surplus since March 2025.
  • CRR cut of 100 bps releases ₹2.7 trillion in tranches, easing funding for banks.
  • Easy funding helps pass policy rate changes on to borrowers.

Exam angle

  • Tools: G-Sec purchases and CRR cut; agency: Fitch.

Test yourself

1. How much liquidity did RBI inject into the banking system since January 2025, per Fitch Ratings?

Fitch cited ₹5.6 trillion, equal to 2% of system assets.

2. How much liquidity will the 100 bps CRR cut release in phased tranches, according to Fitch?

The CRR cut will release ₹2.7 trillion.

3. Fitch expects how large a policy rate cut in 2025?

RBI's actions align with an expected 100 bps rate cut in 2025.

This topic is part of Daily Current Affairs 17 July 2025 (16 topics).

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