As FY25 ended, Reserve Bank of India (RBI) announced its successful interventions for managing liquidity in the economy. While the liquidity deficit stood at ₹3.3 lakh crore in January 2025, with back-to-back open market operations, by the end of March or the Fiscal year 2025, RBI turned that around and now we have a liquidity surplus of ₹89400 crore. So, how RBI made this possible? Let’s find out.
Highest Open Market Operations
In FY25, RBI conducted the maximum number of Open Market Operations (OMO) compared to the past four years. This has been the primary reason to boost the liquidity of the nation. At the end of March 2025, the Indian banking system had ₹89400 crore as liquidity surplus, which stood at ₹3.3 lakh crore of liquidity deficit in January 2025. RBI infused liquidity through OMO aggressively, and that is reflected in the recent numbers as well.
The central bank infused ₹1 lakh crore via equally-divided two OMO tranches in March. Apart from this, the RBI infused liquidity using currency swaps and other instruments as well.
The central bank has been on its toes to keep monitoring the liquidity concerns of the banking system and immediately take actions to resolve issues and build market momentum. This has immensely helped in increasing the market liquidity and maintaining the same.
Upcoming OMO
Following the March OMO, the RBI has announced another liquidity infusion via ₹80000 crore OMO, and this will be carried out via four tranches of ₹20000 crore each. The dates for OMO are as follows –
- 3 April 2025
- 8 April 2025
- 22 April 2025
- 29 April 2025
Importance of Open Market Operations by RBI
Given the current economic scenario, this liquidity infusion by the RBI is crucial, which has been achieved through open market operations growth. India is witnessing an economic recovery, and thus demand for liquidity is high, which is coupled with inflationary pressure, reduced industrial output, and also global market slowdown is taking a toll on the citizens, banking system, and the economy as well. Other geopolitical scenarios, such as in Ukraine, Russia, the US-China trade war, and others, are adding fuel to the fire. Thus, maintaining a healthy liquidity level in the banking system can help fuel the economy and help it surpass this challenging time too.
Source: CNBC TV18
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