RBI considers bond sales and FX swaps to drain cash
Reserve Bank of India Governor Sanjay Malhotra said bond sales and foreign exchange swaps are among the tools available to manage surplus banking liquidity and align rates. The comments pushed Indian bond yields to their highest levels in over three months.
Xurve View
Insights:
Xurve View
The Reserve Bank of India is evaluating bond sales and FX swaps to drain surplus cash and keep overnight rates aligned with the key repo rate, Governor Sanjay Malhotra said on Friday. The measures come as banking liquidity in India hovers above 10 trillion Indian rupees following a $127 billion forex mobilisation scheme. The central bank's liquidity absorption aims to counter excess cash driven by robust credit growth and foreign exchange inflows.
