Economists welcome RBI move to withdraw ICRR in a phased manner

economictimes.indiatimes.com:

Overall, RBI move to discontinue ICRR in a phased manner is a prudent measure, but having said that, from a medium to longer term perspective, this is one other tool whereby RBI is very clearly indicating that the market can be used to manage liquidity and to take care of any surpluses that build up either through FX sources or otherwise, says Indranil Pan, Chief Economist, Yes Bank.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank, says RBI probably has taken a measure to discontinue the ICRR in a gradual manner because briefly liquidity may tighten significantly because of advance tax outflows and GST outflows

Upasna Bhardwaj, Chief Economist, Kotak Mahindra BankRBI is saying that they are going to discontinue the ICRR in a phased manner. What is the first indication that you are picking up from this? What does it mean for the system as a whole?
As a result of the imposition of ICRR, close to Rs 1 lakh crore of liquidity was withdrawn from the banking system.

That is something which RBI has said will be infused back into the system but in a very gradual, phased manner. The existing system liquidity overhang had required RBI to act earlier and now that system liquidity is back in surplus, RBI probably has taken a measure to discontinue the ICRR in a gradual manner because briefly liquidity may tighten significantly because of advance tax outflows and GST outflows in the middle but towards the end of the month, we again expect liquidity surplus to improve.