By Srijita Chakraborty
On Friday, the Reserve Bank of India has decided to take a series of measures to inject more than 2 lakh crores into the economy by strengthening the liquidity conditions in the financial markets themselves.
After reviewing the current liquidity levels and financial conditions, the central bank promised that through a combination of tools, such as open market bond purchases, a foreign exchange swap, and a variable rate repo operation, more money would be made available for banks.
As part of this process, it has been decided that a 90-day variable rate repo (VRR) worth Rs 25,000 crore will be undertaken by the RBI on January 30, 2026. By doing so, banks will be allowed to borrow funds from the central bank by offering approved securities against market-linked rates of interest.
Additionally, the RBI has announced its plan to conduct USD/INR buy-sell swaps to the tune of $10 billion, to be auctioned on February 4, and will have an option to mature in three years. This will help infuse rupee liquidity and manage the ongoing conditions in the exchange market.
Besides, the RBI will conduct an open market auction in February, in which government securities amounting to a total of ₹1 Lakh Crore will be purchased. These purchases will be made in two installments in which ₹ 50,000 Crore of securities will be purchased while in another installment ₹ 50,000 Crore of securities will be purchased. The former instalment will be made on 5th February while the latter instalment will be made on 12th February.
The RBI stated that it will provide detailed guidelines on each of these operations in liquid markets. It added that it would continue to closely monitor the liquidity situation and take other measures to ensure that the financial markets function in an orderly way.