RBI to Infuse ₹80,000 Crore via OMOs Ahead of April Policy Meet
Just a week before its April monetary policy review, the Reserve Bank of India (RBI) has announced a significant ₹80,000 crore liquidity injection into the banking system through Open Market Operations (OMOs). This move is being seen as a strategic step to ensure that banks can fully transmit potential interest rate cuts to borrowers.
The bond purchase program will take place in four tranches:
📅 April 3, April 8, April 22, and April 29 – with ₹20,000 crore each time.
Why Is RBI Injecting Liquidity?
✅ Boosting Banking Liquidity: Ensuring banks have enough cash to support lending.
✅ Enhancing Rate Transmission: Aiding banks in passing on lower interest rates to customers.
✅ Stabilizing Market Conditions: Keeping cash conditions smooth amid economic fluctuations.
Economists suggest this move signals RBI’s intent to maintain surplus liquidity, as adequate liquidity is crucial for any reduction in interest rates.
Is a Repo Rate Cut Coming?
Speculation is growing that the Monetary Policy Committee (MPC) may announce a 25 basis points cut in the policy repo rate (currently at 6.25%) during its upcoming April 7–9 meeting.
💡 In February 2025, RBI had already cut the repo rate by 25 basis points, marking the first reduction after keeping it unchanged for 11 consecutive meetings.
What Experts Are Saying
🔹 Gaura Sen Gupta, Chief Economist, IDFC First Bank:
“Cash flow typically stabilizes when liquidity is between ₹1 lakh crore and ₹2 lakh crore. Despite this move, RBI might slow down liquidity actions depending on its dividend payouts.”
🔹 RBI Statement on OMO:
“We will monitor evolving liquidity conditions and market dynamics to ensure adequate banking system liquidity.”
Key Takeaways
✔ ₹80,000 crore OMO to boost banking liquidity.
✔ April MPC meeting could see another 25 bps rate cut.
✔ RBI remains committed to liquidity management, ensuring economic stability.
What’s Next?
All eyes are on RBI’s April policy meet! Will the repo rate cut materialize? And how will banks respond to this liquidity boost?
What do you think about RBI’s move? Will home loan EMIs drop further? Drop your thoughts in the comments!
