Liquidity in the banking system has increased by at least Rs 1 trillion since the last week of June as the government has stepped up spending, and the Reserve Bank of India (RBI) has started winding down its outstanding position in the currency forward segment. Net daily liquidity absorbed from banks on July 9 was Rs 4.6 trillion, data released on Monday showed.

       Including the outstanding operations, such as long-term repo and standing liquidity facility availed from the RBI, the system liquidity surplus surged to nearly Rs 5.6 trillion. The daily net liquidity absorption from banks ...