The Reserve Bank of India is no longer reacting to liquidity pressures—it is pre-empting them. By announcing ₹800 billion of government bond purchases this April, the central bank is actively shaping conditions for smoother monetary transmission, even as system liquidity returns to surplus.Liquidity turned positive for the first time since mid-December, reflecting more than ₹5 trillion injected via bond purchases and FX swaps since January. Rather than ease off, the RBI is doubling down, signalling its intent to engineer a sustained surplus—a cushion that helps banks pass on previous and future rate cuts.
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