RBI Announces Liquidity Management Measures

Mumbai, January 27, 2025: In a bid to manage liquidity conditions in the banking system, the Reserve Bank of India (RBI) has announced a series of measures aimed at injecting liquidity and ensuring stability in financial markets. The decision follows a review of current liquidity and financial conditions.

The central bank will conduct Open Market Operations (OMO) through the purchase of Government of India securities amounting to ₹60,000 crore. These will be carried out in three tranches of ₹20,000 crore each on January 30, February 13, and February 20, 2025.

Additionally, the RBI will conduct a 56-day Variable Rate Repo (VRR) auction for a notified amount of ₹50,000 crore on February 7, 2025. This is intended to provide short-term liquidity support to banks.

To address currency market dynamics, the RBI has also announced a USD/INR Buy/Sell Swap auction involving $5 billion for a six-month tenor. This operation is scheduled for January 31, 2025, and is expected to help stabilize forex market conditions and ensure adequate dollar liquidity.

Detailed instructions for each of these operations will be issued separately, the RBI stated. The central bank reiterated its commitment to monitoring evolving liquidity and market conditions and assured stakeholders that it will take further measures as necessary to maintain orderly liquidity conditions.

These announcements come amid global and domestic factors influencing liquidity and credit flows in the economy, underlining the RBI’s proactive approach to maintaining financial stability.