Perspective on RBI liquidity measures by Sachin Sawrikar, Founder and Managing Partner, Artha Bharat Investment Managers
Below the Perspective on RBI liquidity measures by Sachin Sawrikar, Founder and Managing Partner, Artha Bharat Investment Managers
The RBI’s announcement of Rs 2 lakh crore in government bond purchases along with a $10 billion USD/INR swap is timely and well calibrated. Liquidity conditions had tightened due to seasonal tax outflows and sustained forex operations, pushing short-term rates above the policy corridor. If left unaddressed, this could have constrained credit flow and raised funding costs for productive sectors of the economy, particularly at a time when supportive financial conditions remain important.
What is particularly encouraging is the choice of instruments that inject durable liquidity without distorting market signals. Open market bond purchases provide direct support to the banking system, while the forex swap helps manage rupee liquidity without creating unintended cues on currency policy. Together, these measures stabilise money markets, moderate volatility, and ensure smooth transmission of monetary policy.
This is clearly a proactive liquidity management step rather than a response to stress. It reinforces confidence in the RBI’s ability to anticipate evolving conditions while continuing to support credit growth, investment activity, and India’s broader economic momentum.
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