Liquidity in the banking sector has contracted to below ₹5 lakh crore, causing the weighted average call rate to rise to 5.31%. The Reserve Bank of India is undertaking actions to absorb surplus liquidity. With government expenditures and bond sales looming, analysts predict a return to normalcy in liquidity levels, hovering near ₹5 lakh crore by month-end, while the Reserve Bank maintains oversight on the call rate.
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