Monetary policy and exchange rate measures stabilised capital flows, addressed CAD and guided liquidity and inflation outlook. Reserve Bank of India tightened liquidity and raised the MSF rate to defend the rupee during capital outflows, used forex swap windows and import-side measures to reduce gold and import demand, and then normalised exceptional measures as buffers were rebuilt. The CAD fell sharply and reserves were restored; monetary stance remained tight with the policy corridor restored while variable-rate term repos, OMOs and a refinance facility were deployed to manage liquidity and sectoral stress amid persistent inflation and weak investment.
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Monetary policy and exchange rate measures stabilised capital flows, addressed CAD and guided liquidity and inflation outlook.
Reserve Bank of India tightened liquidity and raised the MSF rate to defend the rupee during capital outflows, used forex swap windows and import-side measures to reduce gold and import demand, and then normalised exceptional measures as buffers were rebuilt. The CAD fell sharply and reserves were restored; monetary stance remained tight with the policy corridor restored while variable-rate term repos, OMOs and a refinance facility were deployed to manage liquidity and sectoral stress amid persistent inflation and weak investment.
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