UPSC CSE MAINS SYLLABUS- GS – 3- Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

RBI and Liquidity

On January 8, the Reserve Bank of India (RBI) announced its intention to “restore normal liquidity management operations in a phased manner.” It announced the resumption of variable rate reverse repo auctions, the first of which will be held on January 15, for an amount of Rs 2 trillion, and a tenor of 14 days.

Over the pandemic period, the central bank had taken several steps to infuse liquidity, cut policy rates and eased regulatory norms. The latest announcement comes as a first step towards normalisation.


There are two implications of this step.

Why the measure now:

What next:

Source:”Financial Express”.


Discuss the RBI’s policy to restart variable rate reverse repo auctions, as a first step towards normalising excess liquidity.