RBI plans to inject ₹1.5 lakh crore to boost rate transmission and economic activity.
Summary
The Reserve Bank of India (RBI) is considering injecting ₹1.5 lakh crore into the financial system to facilitate the transmission of recent interest rate cuts to the broader economy. This measure aims to counteract liquidity drains stemming from advance tax payments and potential forex market interventions, ensuring that lower interest rates effectively stimulate economic activity.
Key Points
- RBI may inject ₹1.5 lakh crore into the financial system.
- The injection aims to ensure effective transmission of interest rate cuts.
- Liquidity drains from advance tax payments are a key factor.
- Forex market interventions are also considered.
- The move is intended to boost economic activity.
Full Article
To ensure the recent interest rate reduction truly benefits the economy, the Reserve Bank of India may have to infuse a staggering 1.5 lakh crore into the financial system. This move is seen as vital to offset the liquidity drains caused by advance tax payments and possible forex market interventions.