Govt borrowing creates liquidity stress

.....As liquidity shortage has breached its tolerance, RBI, has reduced CRR on two occasions in the recent past. Notwithstanding the two cumulative reductions, banks on an average borrowed Rs 1.50 lakh crore from the RBI on a daily basis between March 10 and March 31, 2012. What have been the drivers of persistent liquidity shortage in the system in the last six months? ........

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