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Flood of liquidity

May 03, 2025

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Financial Express Lucknow

A pause on rates in June is quite possible as the RBI weighs the global situation

The Reserve Bank of India's (RBI) announcement of open market operations (OMO) worth ₹1.25 trillion for May was unexpected but it establishes the regulator's intent to walk the talk on liquidity. With this, the cumulative infusion of durable liquidity since December 2024 would be in the region of ₹8.6 trillion, of which a little over ₹5 trillion will be via the OMO route, which involves buying or selling government securities to influence the money available to banks.

Indeed, with a 4% retail inflation looking to be a reality, the central bank is making sure liquidity is in alignment with the accommodative stance outlined at the April monetary policy review. RBI Governor Sanjay Malhotra has repeatedly reassured the markets that money would be more than adequate, indicating a level of 1-1.5% of net demand and time liabilities (NDTL) or about ₹2-2.5 trillion. Headline liquidity has moved from an average deficit of 0.9% of NDTL in January to a surplus of 0.6% in April.

المزيد من القصص من Financial Express Lucknow

Financial Express Lucknow

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time to read

2 mins

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Financial Express Lucknow

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time to read

2 mins

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time to read

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time to read

2 mins

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Financial Express Lucknow

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time to read

1 min

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