Key Announcements made by RBI
Open Market Purchase of Government Securities (G-Secs) worth ₹1 Lakh Crore.
Liquidity injection to be conducted in two tranches:
– ₹50,000 crore on March 12
– ₹50,000 crore on March 18
Forex Swap of $10 billion (36 month tenor) on March 24.
Objectives of the Move
- The decision was taken after a careful review of the current and evolving liquidity conditions in the banking system.
- The objectives of the RBI are to keep sufficient liquidity in the financial markets and to support economic stability.
- The RBI specifically stated that it is monitoring liquidity and market conditions continuously and would take necessary action to keep the financial flows smooth.
Possible Implications
- The G-Sec purchase will inject liquidity into the banking system, making it easier for funds to flow.
- The Forex swap may help with the currency volatility management and the stabilization of rupee with respect to the dollar.
- All these actions show that the RBI is acting reactively on financial liquidity management and supporting economic growth.
The latest measure of the RBI is a signal for strategic intervention to boost liquidity and stabilize the financial system, thereby ensuring smooth market operations under evolving economic conditions.
