The RBI said it would buy Rs 2 lakh crore of It will also conduct a $10-billion buy/sell swap auction on Jan. 13 to ease dollar liquidity. The measures come as system liquidity turned negative mid-December, driving the weighted average call rate to 5.46%, above the 5.25% repo rate.“The announced operations go beyond market expectations and should provide confidence around durable liquidity availability, alleviate demand-supply concerns, and support investor sentiment in the bond market,” said VRC Reddy, he ...

A Although the Reserve Bank of India has announced liquidity measures for mid-December infusing '1.45 lakh crore, it may not be sufficient as these infusions coincide with advance tax payments estimated at '2-2.5 lakh crore, draining funds from the banking system. Secondly, any further intervention from foreign exchange can drain rupees from the banking system. "I don't think deposit rates will fall that sharply, and they're unlikely to drop right away. But as the RBI starts adding more liquidity into the ...