Current Affairs · Monetary Policy & Liquidity Management
Case Study: The Reserve Bank of India (RBI) is actively navigating the dual macroeconomic challenges of managing extreme rupee volatility and an acute systemic liquidity deficit. As part of its strategy to inject durable rupee liquidity while stabilizing its foreign exchange reserves, the central bank recently announced a massive $10 billion buy/sell forex swap auction. This operation complements previous liquidity injections made through OMO purchases, FX swaps, and long-duration variable rate repos. Considering the operational and macroeconomic specifics of these interventions, which of the following combinations correctly identifies the amount of durable liquidity already injected by the RBI through various tools, the exact liquidity deficit standing as of Thursday, and the current value of the foreign exchange reserves following recent declines?
- 1Over ₹3.6 trillion injected, ₹1.87 trillion liquidity deficit, and $636 billion in forex reserves✓
- 2Exactly ₹3,90,000 crore injected, ₹1.87 trillion liquidity deficit, and $705 billion in forex reserves
- 3Over ₹3.6 trillion injected, ₹2.00 trillion liquidity deficit, and $638 billion in forex reserves
- 4Over ₹3.9 trillion injected, ₹1.50 trillion liquidity deficit, and $705 billion in forex reserves
Correct answer
Over ₹3.6 trillion injected, ₹1.87 trillion liquidity deficit, and $636 billion in forex reserves
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