RBI Inflation Mandate Likely Driving Liquidity Drain in India
What happened
Radhika Rao, Senior Economist at DBS Bank, stated that the Reserve Bank of India’s inflation mandate is likely reinforcing the push to drain excess liquidity. She added that short-end rates are likely to remain high as markets price in potential rate increases at the October meeting. The liquidity balance for the Indian Rupee has narrowed significantly, falling below Rs 5 lakh crore.
From ianslive.in
Why it matters
The liquidity management is influenced by factors including tax outflows, rising seasonal currency leakage, and intermittent foreign exchange sales. The Indian Rupee is facing pressure from rising US yields and central bank intervention to manage its valuation.
From ianslive.in
Who's involved
- Radhika RaoSenior Economist at DBS Bank, commenting on central bank policy.
- DBS BankMultinational banking and financial services company based in Singapore.
- Indian RupeeOfficial currency of the Republic of India, subject to liquidity management.
- Reserve Bank of IndiaCentral bank of India, whose policies are under scrutiny.
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The entities involved
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Radhika Rao
Indian film director
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DBS Bank
multinational banking and financial services company based in Singapore
Nothing else this week.