India’s RBI Plans to Drain $11.7 Billion From Banking System

India’s central bank announced plans to withdraw excess liquidity from the banking system, a move likely aimed at stemming the recent slide in overnight borrowing costs.

The Reserve Bank of India said in a statement it will drain 1 trillion rupees ($11.7 billion) on July 4 via a seven-day variable reverse repurchase auction. Through such moves, the central bank absorbs surplus funds from banks in exchange for eligible securities.