Once again, RBI makes a crucial decision... What's the reason behind it?
The RBI has taken a crucial decision to inject ₹1.9 lakh crore into the banking system through open market operations and swaps. This move aims to increase liquidity, lower loan interest rates, and stimulate economic growth.
New Delhi: The Reserve Bank of India (RBI) has taken another crucial decision. The RBI has announced measures to inject a significant amount of funds into the domestic banking system. It revealed the process through which these funds will be made available to banking institutions. Through open market operations, security purchases, and actions like dollar-rupee swaps, the RBI plans to inject a total of ₹1.9 lakh crore into the banking system within a month. On February 28, 2025, RBI conducted a dollar-rupee swap auction worth $10 billion.
With this decision, the RBI aims to increase liquidity in the banking system. As a result, banks will have more cash on hand, which will enable them to offer loans at lower interest rates. This, in turn, is expected to encourage people to take more loans. When people have more cash, their purchasing power increases, which benefits the economy. Financial experts believe this move by the RBI is designed to stimulate economic growth.
The RBI has announced that it will purchase securities in two phases, with ₹50,000 crore each on March 12 and March 18. Additionally, a $10 billion USD-INR buy or sell swap auction is likely to be held on March 24. The RBI has stated that it will continuously review the cash availability in the banking system and take appropriate actions based on market conditions. The RBI took similar measures in January and February of this year as well.
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