Reserve Bank of India modifies liquidity framework
Rajan spells out plans to “progressively lower” liquidity deficit in banking system
Raghuram Rajan unveiled "significant refinements" to the Reserve Bank of India's (RBI) liquidity management framework today (April 5), while announcing a further 25 basis point cut to its policy rate.
The governor of the central bank said it would reduce the liquidity deficit in the banking system, narrow the policy rate corridor and provide banks with more flexibility around the cash reserve ratio, among other measures.
He said these actions would help improve the transmission of rate cuts to
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