RBI’s ₹1.5 trillion liquidity boost: How will it help?
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2 months ago

RBI’s ₹1.5 trillion liquidity boost: How will it help?

Live Mint  

The Reserve Bank of India has announced a set of forex and money market measures that will collectively infuse ₹1.5 trillion over time, amid a clamour for liquidity from multiple bankers and money market participants. Average liquidity deficit in the interbank market crossed ₹3.3 trillion last week, thanks to heavy goods and services tax outflows. The liquidity deficit has been primarily because of RBI intervening heavily in the forex market to shore up the rupee over the last two years. The central bank cut the cash reserve ratio by 50 basis points in December, announced daily VRRs and conducted secondary market OMO worth ₹10,000 crore this month.

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History of this topic

Will US Fed's rate pause derail RBI's liquidity easing plans?
1 week, 2 days ago

Will US Fed's rate pause derail RBI's liquidity easing plans?

India Today  

The US Federal Reserve kept its benchmark interest rate steady at 4.25%-4.50%, as expected. The Reserve Bank of India has already started liquidity easing, and there’s growing speculation that another 25 bps rate cut could be on the horizon. The Fed’s stance could create a tailwind for global equities.” Foreign institutional investors have been cautious in recent months, but a …

India’s forex reserves hit $654 billion to record biggest weekly gain in 3 years driven by RBI’s liquidity boost
2 weeks ago

India’s forex reserves hit $654 billion to record biggest weekly gain in 3 years driven by RBI’s liquidity boost

Live Mint  

India’s dollar stockpile had its biggest weekly gain in over three years, bolstered by the Reserve Bank of India 's currency swap operations and liquidity boost last month. This comes after the RBI injected $10 billion through a foreign-exchange swap auction on February 28, stepping up efforts to ease a crunch in the financial system. RBI liquidity boost RBI injected …

Realign policies of RBI to changing economic realities
2 weeks, 6 days ago

Realign policies of RBI to changing economic realities

New Indian Express  

Under the new leadership, the Reserve Bank of India is ‘undoing’ some of the measures taken during the previous regime to allow the banking system to breathe easy. By the time Sanjay Malhotra took the reins of the central bank from Shaktikanta Das in December last year, India’s growth had slowed down to 5.6 percent, and the equity market was …

DC Edit | RBI cautious amid uncertainties
3 weeks, 1 day ago

DC Edit | RBI cautious amid uncertainties

Deccan Chronicle  

The Reserve Bank of India’s announcement to inject nearly Rs 1.9 lakh crore cash into the banking system in March, in addition to Rs 1.7 lakh crores that it infused in February as part of its liquidity-enhancing measures, reflects its concerns about global economic uncertainties. While the RBI injected Rs 1.9 lakh crores through open market options and forex swaps …

​Necessary infusion: on the RBI’s currency swap
1 month ago

​Necessary infusion: on the RBI’s currency swap

The Hindu  

The Reserve Bank of India’s recent decision to inject an additional $10 billion into the financial system through a dollar/rupee swap auction is a timely measure aimed at addressing long-term liquidity concerns among domestic lenders. These concerns stem from a flight of foreign capital from Indian stock markets, as investors seek better returns in the United States amid President Donald …

RBI to conduct $10 billion forex currency exchange to infuse liquidity in India’s banking system
1 month, 1 week ago

RBI to conduct $10 billion forex currency exchange to infuse liquidity in India’s banking system

Live Mint  

MUMBAI - The Reserve Bank of India will conduct a massive $10 billion three-year dollar/rupee swap auction next week to infuse durable rupee liquidity into the banking system, which has been reeling under large cash deficits, the central bank said on Friday. "The three-year maturity of the swap indicates that the RBI is looking at injecting more durable liquidity in …

India’s Economic Growth Set to Pick Up Pace, RBI Says
1 month, 1 week ago

India’s Economic Growth Set to Pick Up Pace, RBI Says

Live Mint  

-- India’s economy has recovered its lost momentum and consumption demand may improve on the back of moderating inflation and tax relief, the Reserve Bank of India said in its monthly bulletin. According to the RBI report, robust monsoon-sown crop and better winter sowing, along with higher reservoir levels, “augur well for food inflation going forward.” But uncertainty in global …

RBI pumps in Rs 45 trillion in banking system since December to meet liquidity needs
1 month, 1 week ago

RBI pumps in Rs 45 trillion in banking system since December to meet liquidity needs

New Indian Express  

MUMBAI: The Reserve Bank has injected a whopping Rs 45 trillion into the banking system since the December 6 monetary policy review when it slashed the cash reserve ratio by 50 bps to 4%, releasing Rs 1.16 trillion into the system. Of the total, more than Rs 43 trillion of fresh liquidity has flown into the system between December 11 …

Rate cut not helping drive growth, focus should be on liquidity measures: Axis Bank economist
1 month, 1 week ago

Rate cut not helping drive growth, focus should be on liquidity measures: Axis Bank economist

Live Mint  

Mumbai, Feb 18 The Reserve Bank should focus on making liquidity easier rather than cutting rates if the intent is to drive growth, Axis Bank's chief economist Neelkanth Mishra said on Tuesday. Mishra said if the objective of the rate cut is to trigger more borrowings, the new loans are not going to get done at lower rate as the …

India rupee to take cues from dollar path, tariff reaction; bonds to eye liquidity moves
1 month, 1 week ago

India rupee to take cues from dollar path, tariff reaction; bonds to eye liquidity moves

Live Mint  

By Dharamraj Dhutia and Nimesh Vora MUMBAI, Feb 17 - The Indian rupee's direction this week will be shaped by the dollar's reaction to its recent correction and whether worries over U.S. tariffs continue to subside, while the bond market will be on watch for any further liquidity infusion measures by the central bank. That was largely due to the …

RBI to inject $16 billion liquidity boost into banking system next week amid tax outflows: Report
1 month, 1 week ago

RBI to inject $16 billion liquidity boost into banking system next week amid tax outflows: Report

Live Mint  

India's central bank, the Reserve Bank of India, is set to ramp up the liquidity in the nation's banking system through the infusion of $16 billion by next week amid the large tax outflows, reported the news agency Reuters. The central bank has doubled the amount of government securities that the nation aims to buy to $4.61 billion, based on …

RBI’s first rate cut in five years is small but can be effective
1 month, 2 weeks ago

RBI’s first rate cut in five years is small but can be effective

Live Mint  

Last week’s monetary policy meeting has several firsts to its credit: It was the first of 2025, the first under a new governor of the Reserve Bank of India, the first since Donald Trump became US president, and the first in five years to cut the repo rate. The result is that the RBI’s operational target—the call money rate, or …

RBI kicks off rate cut cycle—what it means for borrowers and markets
1 month, 3 weeks ago

RBI kicks off rate cut cycle—what it means for borrowers and markets

Live Mint  

The long-awaited policy rate easing by the Reserve Bank of India is finally here. Meanwhile, GDP growth, at 5.4% in the July–September 2024 quarter, is estimated at 6.5% for the full fiscal year—below India’s potential growth rate, warranting monetary support. The RBI is also introducing forward contracts in government securities, enabling long-term investors like insurance funds to better manage interest …

RBI MPC Meeting 2025: RBI cuts lending rate by 25 basis points to 6.25%
1 month, 3 weeks ago

RBI MPC Meeting 2025: RBI cuts lending rate by 25 basis points to 6.25%

The Hindu  

Lowering India’s interest rates for the first time in the last 57 months, the Monetary Policy Committee of the Reserve Bank of India on Friday unanimously cut the repo rate by 25 basis points to 6.25%, to support fading growth in the hope of inflation easing to 4.4% in this quarter and 4.2% through 2025-26. ‘Neutral stance’ In view of …

Liquidity support is priority; rate cut a close call
1 month, 3 weeks ago

Liquidity support is priority; rate cut a close call

Live Mint  

The backdrop of the monetary policy committee meeting later this week is a complex one. So, the MPC must decide whether to stay cautious given the high retail inflation prints in recent months or deliver a rate cut relying on the RBI’s forecast of benign future inflation—overall, it seems to be a close call in February, rather than being a …

Indian banks’ liquidity crunch is partly RBI’s own doing
1 month, 4 weeks ago

Indian banks’ liquidity crunch is partly RBI’s own doing

Live Mint  

The chickens are coming home to roost. In July 2024, RBI had suggested that banks assign an additional 5% ‘run-off factor’—broadly, the portion of deposits kept handy to cover a surge in withdrawals—for retail deposits that can be accessed via internet and mobile banking. One, in accordance with the Basel III framework of the Basel Committee on Banking Supervision, banks …

Widened gap between credit and deposit requires further liquidity boost by RBI: Report
2 months ago

Widened gap between credit and deposit requires further liquidity boost by RBI: Report

Live Mint  

New Delhi, January 29 : The Reserve Bank of India should take further measures to boost liquidity says a report by the Union Bank of India. The report said the gap between the credit and the deposit growth in the Indian banks has gone up over the last two months and it requires further liquidity boost by the central bank. …

Mint Explainer: Understanding how RBI's measures will boost liquidity by ₹1.5 trillion, lead to rate cut
2 months ago

Mint Explainer: Understanding how RBI's measures will boost liquidity by ₹1.5 trillion, lead to rate cut

Live Mint  

The Reserve Bank of India announced a set of forex, money market and interest rate measures that will collectively infuse ₹1.5 trillion over time, amid a clamour for liquidity from bankers and money market participants. The average liquidity deficit in the interbank market crossed ₹3.3 trillion last week, thanks to heavy goods and services tax outflows. While the RBI responded …

RBI Liquidity Steps Send Indian Bond Yields to a Three-Year Low
2 months ago

RBI Liquidity Steps Send Indian Bond Yields to a Three-Year Low

Live Mint  

-- Follow Bloomberg India on WhatsApp for exclusive content and analysis on what billionaires, businesses and markets are doing. “We see measures as a decisive turn in the monetary policy easing cycle by the Reserve Bank of India,” Goldman Sachs Group Inc.’s economists led by Santanu Sengupta, wrote in a note. The Reserve Bank of India late Monday said it …

India’s RBI to ‘Play it Slow’ on Defending Rupee, Axis Bank CEO Says
2 months, 1 week ago

India’s RBI to ‘Play it Slow’ on Defending Rupee, Axis Bank CEO Says

Live Mint  

-- India’s central bank is unlikely to mount a strong defense of the rupee despite the currency’s sharp depreciation, according to Axis Bank Ltd.’s chief executive officer. Chaudhry said he isn’t hopeful of major fiscal support measures in India’s annual budget scheduled to be presented next month, since the government is committed to reducing the fiscal deficit. “You need to …

RBI to continue interventions in forex market, despite tight liquidity
2 months, 1 week ago

RBI to continue interventions in forex market, despite tight liquidity

Live Mint  

Tight liquidity will not bind the Reserve Bank of India’s hands in intervening to curb excessive rupee volatility in the forex market, said a senior official aware of the thinking at the central bank. While liquidity management will not be a constraint for RBI to intervene in the forex market, bankers believe that the central bank will have to infuse …

Indian Banking Liquidity Deficit Hits Highest in Six Months
3 months, 1 week ago

Indian Banking Liquidity Deficit Hits Highest in Six Months

Live Mint  

-- The liquidity deficit in the Indian banking system hit the highest in nearly six months on advance tax payments by companies and likely dollar sales by the central bank to curb rupee volatility. The banking system cash deficit, as measured by banks’ borrowings from the Reserve Bank of India, was at 1.5 trillion rupees as of Monday, the highest …

CRR cut may boost bank margins, but tight liquidity challenges persist: Report
3 months, 2 weeks ago

CRR cut may boost bank margins, but tight liquidity challenges persist: Report

Live Mint  

As widely anticipated, the Reserve Bank of India in its December Monetary Policy Committee meeting announced a 50-basis-point cut in the Cash Reserve Ratio to enhance liquidity in the banking system. While the CRR cut may not immediately influence deposit and lending rates, it is anticipated to boost bank margins, according to SBI Research. SBI pointed out that the expected …

RBI reduces CRR to 4% for liquidity boost. 3 things to know
3 months, 3 weeks ago

RBI reduces CRR to 4% for liquidity boost. 3 things to know

India Today  

The Reserve Bank of India's Monetary Policy Committee has reduced the cash reserve ratio to 4% from 4.5% to address liquidity woes, announced Governor Shaktikanta Das. RBI Governor Shaktikanta Das said that lowering the Cash Reserve Ratio is consistent with the central bank's neutral policy stance. “A CRR cut would inject liquidity into the banking system, providing a cushion for …

RBI Is Said to Shore Up Banking Liquidity Before Rate Decision
3 months, 3 weeks ago

RBI Is Said to Shore Up Banking Liquidity Before Rate Decision

Live Mint  

-- India’s central bank has been shoring up banking system liquidity ahead of a key policy decision, having depleted it in recent days in its efforts to stabilize the rupee, according to people familiar with its transactions. The moves come at a time when the slowest pace of economic expansion in almost two years is mounting pressure on central bank …

RBI Inquiries on Liquidity Spur Speculation of Action Next Week
3 months, 4 weeks ago

RBI Inquiries on Liquidity Spur Speculation of Action Next Week

Live Mint  

-- India’s central bank has stepped up dialogue with traders at treasury desks this week about cash conditions in the banking system, according to people with knowledge of the matter, spurring speculation it may announce some measures to boost liquidity at the policy review on Dec. 6. Banks turned net borrowers from the central bank this week compared with a …

Rate cut expected in Q3FY25, RBI faces liquidity challenge: SBI Research
9 months, 3 weeks ago

Rate cut expected in Q3FY25, RBI faces liquidity challenge: SBI Research

Hindustan Times  

SBI Research, in its recent analysis, predicts that the c is likely to initiate its first rate cut in the third quarter of the financial year 2024-25. Regarding the RBI's stance on the repo rate for monetary policy to be announced on Friday, SBI Research suggests that the central bank should continue with its approach of withdrawing accommodation. The SBI …

What is the outlook on the global economy? | Explained
11 months, 1 week ago

What is the outlook on the global economy? | Explained

The Hindu  

The story so far: The International Monetary Fund released the latest global financial stability report on Tuesday warning about the risks to the global financial system from persistent high inflation, rising lending in the unregulated credit market, and increasing cyber-attacks on financial institutions. Investors have been pushing up the prices of financial assets such as stocks in recent months in …

RBI Monetary Policy Meet underway: Key things to watch out for
1 year, 3 months ago

RBI Monetary Policy Meet underway: Key things to watch out for

Live Mint  

Reserve Bank of India Governor Shaktikanta Das will unveil the fifth monetary policy of the financial year 2023-24 on Friday, December 8, after a two-day review, as it observes the impact of global headwinds on India's macroeconomic indicators such as inflation trajectory and growth in gross domestic product. The review by the six-member Monetary Policy Committee led by Das will …

Deposit of ₹2000 notes, rise in RBI dividends to improve short-term liquidity
1 year, 9 months ago

Deposit of ₹2000 notes, rise in RBI dividends to improve short-term liquidity

Live Mint  

There will be an improvement in short-term liquidity due to an increase in RBI dividends and deposit of ₹2,000 notes by banks till September, predicts India Ratings in its latest edition of the monthly credit market tracking report. The report highlighted that the Banking system liquidity declined as of 25 May 2023 to around ₹500 billion on average. “Decline in …

RBI says India’s growth momentum to continue in FY24; stresses on structural reforms
1 year, 9 months ago

RBI says India’s growth momentum to continue in FY24; stresses on structural reforms

The Hindu  

The Reserve Bank on May 30 said that India’s growth momentum is likely to continue in 2023-24 even as it made a case for pushing structural reforms to deal with the geopolitical developments and also to achieve sustained growth in the medium-term. The Reserve Bank’s annual report flagged slowing global growth, protracted geopolitical tensions and a possible upsurge in financial …

RBI may buy $18 bn of bonds to boost liquidity, says B. Prasanna of ICICI
1 year, 10 months ago

RBI may buy $18 bn of bonds to boost liquidity, says B. Prasanna of ICICI

Live Mint  

The Reserve Bank of India may buy nearly $18 billion of government bonds to replenish banking liquidity that’s expected to tighten later in the year, according to a report by Bloomberg. The central bank may cut the cash reserve ratio by half a point in the second half of the fiscal and start buying bonds in the December quarter to …

₹2,000 note move may have marginal impact
1 year, 10 months ago

₹2,000 note move may have marginal impact

Hindustan Times  

Markets are often curious to decipher the motive and timing of policy decisions, apart from the possible impact. If the ₹2,000 notes are converted into smaller denominations, there is no impact on overall currency in circulation, but in case of these being deposited into bank accounts, cash in the system will drop immediately, and bank deposit growth will pick up. …

Return of ₹2,000 notes to bolster bank coffers, money market liquidity, says research report
1 year, 10 months ago

Return of ₹2,000 notes to bolster bank coffers, money market liquidity, says research report

The Hindu  

The Reserve Bank of India’s decision to withdraw ₹2,000 notes could boost banks’ deposit base and liquidity in the money markets by anywhere between ₹40,000 crore to ₹1.1 lakh crore, even if just about a third of these heavily hoarded high currency notes are flushed out by the exercise, according to a research report. Estimating the stock of ₹2,000 denomination …

Monetary Policy will be watched for liquidity guidance
2 years, 6 months ago

Monetary Policy will be watched for liquidity guidance

Live Mint  

Of late, Indian fixed income markets are witnessing heightened nervousness due to many factors. The banking system’s liquidity slipped into deficit after 40 months on 21 September, led by advance tax outflows for the second quarter and payments for government bonds. Out of the total gross borrowings of ₹14.31 trillion, the government raised ₹7.72 trillion smoothly until 16 September, thanks …

RBI likely to keep key rates steady, liquidity steps eyed
3 years, 9 months ago

RBI likely to keep key rates steady, liquidity steps eyed

India Today  

India's central bank will likely keep interest rates at record lows this week as it assesses the economic fallout of the country's evolving COVID-19 crisis, but the monetary authority is expected to reiterate its commitment on liquidity. The Reserve Bank of India's monetary policy committee will likely keep the key lending rate or the repo rate unchanged at 4% for …

RBI may have to delay liquidity normalisation amid rising virus cases
4 years ago

RBI may have to delay liquidity normalisation amid rising virus cases

Live Mint  

India's central bank may have to delay the start of monetary policy normalisation by three months amid rising COVID-19 cases, but barring the return of stringent lockdowns there is no significant threat to the economy's recovery, analysts say. India needs to take quick and decisive steps soon to stop an emerging second "peak" of COVID-19 infections, Prime Minister Narendra Modi …

Wave of foreign money threatens India’s tight grip on rupee
4 years, 3 months ago

Wave of foreign money threatens India’s tight grip on rupee

Live Mint  

A relentless torrent of funds rushing into India’s markets may tip the central bank’s delicate balancing act in 2021. There’s growing consensus among traders and fund managers that the mounting pressures -- particularly the liquidity glut distorting money markets -- may spur the central bank to consider a range of changes, from relaxing its grip on Asia’s worst-performing currency to …

Torrent of foreign money threatens India’s tight grip on rupee
4 years, 3 months ago

Torrent of foreign money threatens India’s tight grip on rupee

Al Jazeera  

While most currencies in Asia have benefitted from a weaker dollar, India’s rupee is down 3 percent this year. There’s growing consensus among traders and fund managers that the mounting pressures – particularly the liquidity glut distorting money markets – may spur the central bank to consider a range of changes, from relaxing its grip on Asia’s worst-performing currency to …

RBI will continue to maintain ample liquidity, says governor Das
4 years, 3 months ago

RBI will continue to maintain ample liquidity, says governor Das

Live Mint  

RBI governor Shaktikanta Das on Friday assured that the central bank will continue to maintain ample liquidity by using various instruments at the appropriate time. Speaking post the 3-day Monetary Policy Committee meeting, Das said that the central bank will continue to use OMO purchases, Operation Twists and reverse repo to maintain this liquidity. This intervention by RBI in both …

RBI holds rates, sees shallower GDP contraction at 7.5%
4 years, 3 months ago

RBI holds rates, sees shallower GDP contraction at 7.5%

The Hindu  

The Monetary Policy Committee of the Reserve Bank of India on Friday left benchmark interest rates unchanged and maintained an ‘accommodative’ policy stance as it prioritised support for the economy's recovery over ‘sticky’ inflation amid the COVID-19 pandemic. The RBI also brightened its outlook for the economy, projecting that the GDP contraction would narrow to 7.5% for the financial year …

India’s bond market is bracing for liquidity vigilance from regulator
4 years, 3 months ago

India’s bond market is bracing for liquidity vigilance from regulator

Live Mint  

The Reserve Bank of India’s rate-setting committee would make public its vote on interest rates and policy stance on Friday. “On Friday, if we see some statement around liquidity, yields would move up some more,” said a bond trader, requesting anonymity. “The MSS would reduce the liquidity surplus and create room for RBI to conduct OMO purchases,” wrote Anubhuti Sahay, …

Focus on surplus liquidity with rate cut seen remote
4 years, 3 months ago

Focus on surplus liquidity with rate cut seen remote

Live Mint  

With the Reserve Bank of India expected to maintain status quo on benchmark rates in the monetary policy review on Friday, expert opinion is divided on whether the time is ripe for the central bank to absorb surplus liquidity. According to estimates, there is currently ₹5.31 trillion excess liquidity in the banking system following a series of steps by the …

Short-term rates crash in India with funds overflowing with cash
4 years, 4 months ago

Short-term rates crash in India with funds overflowing with cash

Live Mint  

A glut of cash chasing assets in India has caused short-term rates to plunge. Key borrowing costs like the weighted interbank call rate and collateralized money-market rates are way below the Reserve Bank of India’s benchmark in recent days, indicating investors such as mutual funds are accepting returns lower than what RBI’s deposit window would offer banks. “The RBI may …

India is vulnerable to a liquidity trap of its own
4 years, 4 months ago

India is vulnerable to a liquidity trap of its own

Live Mint  

Now that most big central banks across the world have exhausted their monetary firepower in response to the covid crisis, dropping their real policy rates of interest—adjusted for inflation—to negligible levels, the global economy is caught in a “liquidity trap”. “For the first time, in 60 per cent of the global economy… central banks have pushed policy interest rates below …

Loose monetary policy is worsening wealth inequality
4 years, 5 months ago

Loose monetary policy is worsening wealth inequality

Live Mint  

The size of the Atmanirbhar Bharat package announced by Prime Minister Narendra Modi in May was estimated to be about ₹20 trillion, or nearly 10% of gross domestic product. Thus, the actual payout from the Centre’s treasury, or the fiscal resources that would flow out, would only occur in cases of delinquency on these loans, which were presumably at least …

RBI's Accommodative Stance, Liquidity Measures Have Analysts Divided on Next Rate Cut
4 years, 5 months ago

RBI's Accommodative Stance, Liquidity Measures Have Analysts Divided on Next Rate Cut

News 18  

The accommodative stance and many liquidity boosting measures by the Monetary Policy Committee on Friday left economists divided over the scope of a rate cut this fiscal, with some expecting it in February while others ruling it out citing higher inflation. Earlier in the day, RBI Governor Shaktikanta Das left the key policy rate unchanged at 4 per cent, but …

RBI’s accommodative stance, liquidity measures have analysts divided
4 years, 5 months ago

RBI’s accommodative stance, liquidity measures have analysts divided

Live Mint  

The Reserve Bank of India left key interest rates unchanged on Friday but signalled more easing ahead to support an economy that it sees contracting 9.5 per cent in the current fiscal. Earlier in the day, RBI Governor Shaktikanta Das left the key policy rate unchanged at 4 per cent, but offered a host of measures to contain the bond …

RBI buys so many US dollars that it ends up supporting debt market
4 years, 8 months ago

RBI buys so many US dollars that it ends up supporting debt market

Live Mint  

The Reserve Bank of India has accumulated so many dollars recently that it’s having a knock-on impact on the nation’s sovereign debt market. “The central bank’s FX policy is achieving multiple objectives of augmenting reserves, creating liquidity that’s helping demand for bonds, and at the same time curbing rupee volatility,” said Naveen Singh, head of fixed-income trading at ICICI Securities …

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