cautious
20 days agoRBI’s liquidity-boosting measure under-performs as FX intervention offsets gains
The Reserve Bank of India’s phased 100-basis-point cut in the cash reserve ratio (CRR), intended to release roughly ₹2.5 trillion into the banking system, has so far yielded only about half the intended liquidity. Analysts attribute the under-performance to concurrent FX-market interventions and maturity drain of forward contracts. The banking system, instead of moving into surplus, briefly recorded a deficit after the operations began. With yields remaining elevated and liquidity tight, the RBI may need to launch open market operations (OMOs) or other long-term tools to stabilise funding conditions.
Reuters• By Sneha Pathak
Explore:Mutual Fund Screening
cautious
20 days agoRBI’s liquidity-boosting measure under-performs as FX intervention offsets gains
The Reserve Bank of India’s phased 100-basis-point cut in the cash reserve ratio (CRR), intended to release roughly ₹2.5 trillion into the banking system, has so far yielded only about half the intended liquidity. Analysts attribute the under-performance to concurrent FX-market interventions and maturity drain of forward contracts. The banking system, instead of moving into surplus, briefly recorded a deficit after the operations began. With yields remaining elevated and liquidity tight, the RBI may need to launch open market operations (OMOs) or other long-term tools to stabilise funding conditions.
Reuters• By Sneha Pathak
Explore:Mutual Fund Screening
1 min read
89 words
The RBI’s CRR cut has only released half the expected liquidity as FX intervention absorbs the remainder, prompting possible OMOs ahead.
The Reserve Bank of India’s phased 100-basis-point cut in the cash reserve ratio (CRR), intended to release roughly ₹2.5 trillion into the banking system, has so far yielded only about half the intended liquidity. Analysts attribute the under-performance to concurrent FX-market interventions and maturity drain of forward contracts. The banking system, instead of moving into surplus, briefly recorded a deficit after the operations began. With yields remaining elevated and liquidity tight, the RBI may need to launch open market operations (OMOs) or other long-term tools to stabilise funding conditions.
The Reserve Bank of India’s phased 100-basis-point cut in the cash reserve ratio (CRR), intended to release roughly ₹2.5 trillion into the banking system, has so far yielded only about half the intended liquidity. Analysts attribute the under-performance to concurrent FX-market interventions and maturity drain of forward contracts. The banking system, instead of moving into surplus, briefly recorded a deficit after the operations began. With yields remaining elevated and liquidity tight, the RBI may need to launch open market operations (OMOs) or other long-term tools to stabilise funding conditions.
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economy
india
economy
india
monetary policy
liquidity
rbi
Oct 21, 2025 • 08:14 IST