Image Source: The Economic Times
The Reserve Bank of India (RBI) has announced a series of liquidity management measures, including a $10 billion USD/INR buy/sell swap auction on February 4, 2026, and open market purchases of government securities worth ₹1 trillion in two tranches on February 5 and 12. These steps aim to stabilize liquidity conditions.
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In a significant move to manage liquidity in the financial system, the Reserve Bank of India (RBI) has outlined a dual strategy combining foreign exchange operations and government securities purchases. The measures are designed to ensure stability in money markets and support smooth financial operations amid evolving global and domestic conditions.
Key Highlights:
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USD/INR Swap Auction: Scheduled for February 4, 2026, involving a $10 billion buy/sell swap to balance forex liquidity.
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Open Market Operations (OMO): RBI will purchase government securities worth ₹1 trillion, split into two tranches of ₹500 billion each on February 5 and February 12, 2026.
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Liquidity Management: These actions aim to ease tight liquidity conditions and provide confidence to banks and financial institutions.
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Market Impact: The measures are expected to stabilize short-term interest rates, support credit flow, and strengthen investor sentiment.
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Strategic Timing: The interventions come ahead of key fiscal and monetary developments, signaling RBI’s proactive stance in maintaining financial stability.
With these announcements, the RBI has reaffirmed its commitment to ensuring adequate liquidity while balancing currency and bond market dynamics.
Sources: Reserve Bank of India official release; Reuters; Business Standard
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