Finance, Forex and Investments

how does Reserve Bank of India manages liquidity in the Market?

Public Comments

1. Money supply instruments are in the hands of Reserve Bank of India. Statutory Cash Liquidity Ratios are decided by Reserve Bank of India, Also by deciding interest rates on loans and advances. On every Friday all banks are required to purchase government securities in the ratio of their demand and call deposits. Naturally money supply in the market is directly controlled by RBI.