Core Viewpoint - The Reserve Bank of India (RBI) has announced liquidity measures including open market operations (OMOs), dollar-rupee buy-sell swaps, and long-term variable rate repo (VRR) operations to infuse liquidity into the banking system [3][6]. Group 1: Liquidity Measures - The RBI will purchase Government of India securities worth Rs 1 trillion in two tranches of Rs 50,000 crore each on February 5 and February 12 [3]. - A dollar-rupee buy-sell swap of $10 billion for three years will be conducted on February 4 [5][12]. - A 90-day VRR auction for Rs 25,000 crore will be held on January 30 [4][12]. Group 2: Current Liquidity Conditions - Surplus liquidity in the system fell to about Rs 10,000 crore as of Thursday [7]. - Economists predict that the RBI may conduct additional OMOs of Rs 1 trillion by March-end to maintain liquidity around 0.9% of net demand and time liabilities (NDTL) [8][9]. - The RBI aims to ensure orderly liquidity conditions and will continue to monitor evolving market conditions [6]. Group 3: Impact on Forward Book and Market - Buy-sell swaps are primarily used to lengthen the maturity profile of the RBI's forward book rather than to add fresh liquidity [9][10]. - The net short-dollar positions in contracts of less than a year decreased to $37.9 billion at the end of November, while short positions in contracts of more than a year increased to $28 billion [10]. - OMO auctions are expected to soften the yield on the benchmark 10-year government bond by 2-3 basis points [11][13].