
India's Central Bank to Inject $18 Billion Amid Severe Cash Shortage
India's central bank, the Reserve Bank of India (RBI), has announced plans to inject nearly $18 billion into the domestic financial system to address a severe cash shortage impacting the country's economic growth. This initiative follows a recent report by Bloomberg News which highlighted aggressive measures taken by the RBI to alleviate the liquidity crunch that has been ongoing for over a decade.
On January 15, the RBI began implementing daily variable repo rate auctions, and recently, it executed a substantial purchase of bonds from the open market. The central bank plans to further support the financial system by buying 600 billion rupees ($6.9 billion) worth of bonds via auction purchases, holding a $5 billion dollar/rupee forex swap on January 31, and an additional injection of 500 billion rupees through a 56-day longer tenor repo auction on February 7.
According to data from the IndexBox platform, India's economy is slated to grow at its slowest rate in four years, increasing calls for interest rate cuts. Economists and analysts have raised concerns that the ongoing cash crunch could tighten financial conditions affecting lending and potentially stunting economic growth.
Radhika Piplani, an economist with DAM Capitalist, remarked, "It's all hands in the game now," emphasizing the urgency of the measures preceding the upcoming budget and policy announcements. She added that these actions indicate the governor's intent for the system to be prepared for anticipated interest rate cuts.
The RBI's move encompasses three tranches of bond purchase auctions worth 200 billion rupees each, to be held on January 30, February 13, and February 20. Current data indicates a shortfall in banking system liquidity by three trillion rupees, exacerbated by the RBI's forex market interventions and recent tax outflows.
Puneet Pal, head of fixed income at PGIM India Asset Management, noted, "It is a bit earlier than expected but nonetheless a major move," predicting a further rally in bonds despite a gradual steepening of the yield curve. The yield on the 10-year bond fell to a near three-year low following the RBI's announcement, and the rupee saw a 0.13% decrease in offshore trading.
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1. INTRODUCTION
Making Data-Driven Decisions to Grow Your Business
- REPORT DESCRIPTION
- RESEARCH METHODOLOGY AND AI PLATFORM
- DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
- GLOSSARY AND SPECIFIC TERMS
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2. EXECUTIVE SUMMARY
A Quick Overview of Market Performance
- KEY FINDINGS
- MARKET TRENDS This Chapter is Available Only for the Professional Edition PRO
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3. MARKET OVERVIEW
Understanding the Current State of The Market and Its Prospects
- MARKET SIZE
- CONSUMPTION BY COUNTRY
- MARKET FORECAST TO 2030
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4. MOST PROMISING PRODUCT
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- BEST-SELLING PRODUCTS
- MOST CONSUMED PRODUCT
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5. MOST PROMISING SUPPLYING COUNTRIES
Choosing the Best Countries to Establish Your Sustainable Supply Chain
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- TOP PRODUCING COUNTRIES
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6. MOST PROMISING OVERSEAS MARKETS
Choosing the Best Countries to Boost Your Exports
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- TOP CONSUMING MARKETS
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7. GLOBAL PRODUCTION
The Latest Trends and Insights into The Industry
- PRODUCTION VOLUME AND VALUE
- PRODUCTION BY COUNTRY
8. GLOBAL IMPORTS
The Largest Importers on The Market and How They Succeed
- IMPORTS FROM 2012–2024
- IMPORTS BY COUNTRY
- IMPORT PRICES BY COUNTRY
9. GLOBAL EXPORTS
The Largest Exporters on The Market and How They Succeed
- EXPORTS FROM 2012–2024
- EXPORTS BY COUNTRY
- EXPORT PRICES BY COUNTRY
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10. PROFILES OF MAJOR PRODUCERS
The Largest Producers on The Market and Their Profiles
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11. COUNTRY PROFILES
The Largest Markets And Their Profiles
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- China
- Japan
- Germany
- United Kingdom
- France
- Brazil
- Italy
- Russian Federation
- India
- Canada
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- Republic of Korea
- Spain
- Mexico
- Indonesia
- Netherlands
- Turkey
- Saudi Arabia
- Switzerland
- Sweden
- Nigeria
- Poland
- Belgium
- Argentina
- Norway
- Austria
- Thailand
- United Arab Emirates
- Colombia
- Denmark
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- Finland
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- Kazakhstan
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- Czech Republic
- Qatar
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- Vietnam
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LIST OF TABLES
- Key Findings In 2024
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Per Capita Consumption, By Country, 2018–2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country Of Destination, 2012–2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, By Country Of Origin, 2012–2024
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LIST OF FIGURES
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Consumption, By Country, 2024
- Market Volume Forecast to 2030
- Market Value Forecast to 2030
- Products: Market Size And Growth, By Type
- Products: Average Per Capita Consumption, By Type
- Products: Exports And Growth, By Type
- Products: Export Prices And Growth, By Type
- Production Volume And Growth
- Exports And Growth
- Export Prices And Growth
- Market Size And Growth
- Per Capita Consumption
- Imports And Growth
- Import Prices
- Production, In Physical Terms, 2012–2024
- Production, In Value Terms, 2012–2024
- Production, By Country, 2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, 2012–2024
- Imports, In Value Terms, 2012–2024
- Imports, In Physical Terms, By Country, 2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country, 2012–2024
- Exports, In Physical Terms, 2012–2024
- Exports, In Value Terms, 2012–2024
- Exports, In Physical Terms, By Country, 2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, 2012–2024