New Delhi, Dec 23 (UNI) In a decisive move to ensure adequate liquidity and maintain stability in financial markets, the Reserve Bank of India (RBI) on Tuesday announced a comprehensive set of measures to inject liquidity into the banking system.
The central bank said it will deploy a mix of open market bond purchases and a long-term dollar-rupee swap after reviewing prevailing liquidity and financial conditions.
At the centre of the announcement is a Rs 2 lakh crore liquidity infusion through open market operation (OMO) purchases of Government of India securities. The RBI will conduct these purchases in four equal tranches of Rs 50,000 crore each, spread across December 29, 2025, January 5, January 12, and January 22, 2026.
By buying government bonds from the secondary market, the RBI will release durable rupee liquidity into the system, easing funding pressures for banks.
In addition, the RBI will conduct a USD/INR buy-sell swap auction of USD 10 billion with a tenor of three years on January 13, 2026. The long tenor of the swap suggests the central bank’s intention to provide sustained liquidity support while also managing foreign exchange flows in a non-disruptive manner.
The measures come at a time when liquidity conditions have tightened due to a combination of factors, including advance tax outflows, seasonal currency demand, government cash balances, and continued strong credit growth.
While headline liquidity has oscillated in recent weeks, banks have faced intermittent funding pressures, pushing short-term money market rates toward the upper end of the policy corridor.
By announcing OMOs alongside a forex swap, the RBI is signalling a calibrated and multi-pronged approach to liquidity management. The OMO purchases will inject rupee liquidity directly into the banking system, while the dollar swap will provide an additional liquidity buffer without exerting undue pressure on the rupee or foreign exchange reserves.
The central bank emphasised that detailed operational guidelines for each of the announced measures will be issued separately. It also reiterated its commitment to closely monitoring evolving liquidity and market conditions and taking further steps as necessary to ensure orderly functioning of the financial system.
The latest action underscores the RBI’s preference for active liquidity management using a mix of conventional and market-based instruments.
By providing durable liquidity support without altering policy rates, the central bank is reinforcing its stance of maintaining growth-supportive conditions while keeping inflation risks under close watch.
As the economy enters the new calendar year, the RBI’s liquidity operations are expected to play a critical role in sustaining credit momentum, stabilising financial markets, and reinforcing confidence among banks and investors alike.
