RBI makes fresh amendments to liquidity framework
Central bank asks government for new tools
The Reserve Bank of India has announced plans for new adjustments to its liquidity management framework, continuing work begun under previous governor Raghuram Rajan.
At its monetary policy meeting today (April 6), the central bank kept the policy rate on hold at 6.25%. However, it narrowed the corridor around the policy rate to +/–25 basis points, reflecting improvements in its ability to manage liquidity – better “marksmanship” as Rajan put it in April 2016.
The aim of the narrower corridor
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