RBI Policy
To release revised liquidity mgmt framework as soon as possible
This story was originally published at 15:49 IST on 6 June 2025
Register to read our real-time news.Informist, Friday, Jun. 6, 2025
--RBI Sankar: To release liquidity mgmt framework post internal examination
--RBI Malhotra: Want liquidity mgmt framework revision as soon as possible
MUMBAI – The Reserve Bank of India plans to revise the liquidity management framework as soon as possible, Governor Sanjay Malhotra said on Friday. "Once internal examination is over, we will come out with the framework," Deputy Governor T. Rabi Sankar said in a post-policy press conference.
"The money markets are not unified...from a transmission perspective therefore, we need to understand these issues deeper. We have been examining this issue and I cannot give a timeframe on this," Malhotra said.
In its annual report for financial year ended Mar. 31, the RBI had set out its agenda to review the liquidity management framework in 2025-26 (Apr-Mar). In the report, the RBI said it will revisit the optimal level of systemic liquidity required for effective transmission of monetary policy.
The central bank's Monetary Policy Committee Friday lowered the policy repo rate by 50 basis points to 5.50%. The committee also changed the policy stance to 'neutral' from 'accommodative'. The RBI also cut the cash reserve ratio by 100 bps to 3.00% of banks' net demand and time liabilities, in four tranches starting September, which will infuse INR 2.5 trillion of liquidity into the banking system.
The RBI has already infused INR 9.5 trillion of liquidity into the banking system since January, the governor said. Of this, open market purchases of gilts, including through RBI's Negotiated Dealing System-Order Matching platform, injected durable liquidity amounting to INR 5.2 trillion. Term variable rate repo auctions and dollar/rupee buy-sell swaps injected liquidity amounting to INR 2.1 trillion and INR 2.2 trillion, respectively, during the same period. End
Reported by Srijita Bose
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
