The Reserve Bank of India absorbed ₹2 lakh crore in surplus liquidity through a 7-day Variable Rate Reverse Repo auction, accepting bids at a 5.24% cut-off rate and a 5.23% weighted average rate. Demand exceeded supply: banks submitted bids worth ₹2,28,098 crore against the notified ₹2 lakh crore, signaling that system liquidity remains in clear surplus. The RBI's decision to cap acceptance at the notified amount rather than absorb the full bid volume is a deliberate calibration, not a passive drain. VRRRs are a standard short-term sterilization tool the RBI deploys to prevent excess liquidity from pushing overnight rates below the policy corridor floor, maintaining the repo rate's effectiveness as the primary signal. With the accepted rate settling near the standing deposit facility rate, the auction outcome confirms the RBI is actively managing the lower bound of its interest rate corridor. Watch for follow-on VRRR auctions or open market operations if surplus conditions persist, as sustained excess liquidity could complicate the transmission of monetary policy signals to lending rates.
Pakistan's economy grew 3.7 percent in FY2026, its fastest rate in four years, according to the Pakistan Economic Survey presented by Finance Minister Muhammad Aurangzeb. Growth beat last year's 3.18 percent but missed the 4.2 percent target, with floods, regional conflict, and weaker food exports cited as key drags.
The Union government released an additional Rs 1,09,019 crore in tax devolution to states on August 1, 2026, separate from the regular monthly transfer. The lump-sum release aims to accelerate state capital spending in the July-September quarter, with Uttar Pradesh, Bihar, and Madhya Pradesh among the top recipients.
US mortgage rates have risen to a one-year high as markets weigh Federal Reserve rate uncertainty and Middle East conflict-driven inflation fears. Higher rates increase monthly payments for new buyers and are likely to further suppress housing market activity and refinancing.
Pakistan's Sensitive Price Index rose 13.52 percent year on year for the week ending July 2, 2026, marking 45 consecutive weeks of annual gains. Electricity up 49 percent, wheat flour up 68 percent, and LPG up 44 percent year on year are the main drivers.
