Suyash Choudhary, head-fixed income at IDFC Mutual Fund, spoke to CNBC-TV18 about the inflows in the debt mutual funds and underlying market sentiment.

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“The flow into liquid funds is also very closely correlated to general liquidity conditions in the economy,” Choudhary said.

Talking about the RBI measures to ramp up liquidity, Choudhary said, “If RBI were to not be very proactive in creation of liquidity, we are seeing core liquidity deficit at minus 2 percent of net demand time liabilities of banks by March 15th.”

“To give a very near-term example, by November 10th itself core liquidity will be in excess of 1 lakh crore deficit if RBI had done nothing; as we know RBI is doing 36,000 crore of open market operations (OMOs) this month,” he added.

On the NBFC front, he said, "We do not see a liquidity concern for large non-banking financial companies (NBFCs) and housing finance companies (HFCs)."

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