Covid-19 Impact: RBI Takes Steps To Infuse Liquidity

Dollar swap auction worth $2 b, long-term repo operations in tranches in the works

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To ensure that the effects of the Covid-19 pandemic on the Indian economy are mitigated and that financial markets and institutions continue to function normally, the Reserve Bank of India on Monday said it will once again conduct a sell/buy swap auction worth $2 billion to provide dollar liquidity. It will persist with longterm repo operations (LTROs) to infuse long-term rupee liquidity amounting to ₹ 1 lakh crore.

While there was speculation in the financial markets that the RBI would announce an inter-meeting repo rate cut in sync with what some of the other G-20 central banks have done to prop up their economies, Governor Shaktikanta Das said the RBI’s effort is to see that its responses are neither premature nor delayed.