Reserve Bank of India (RBI) has once again skipped its regular 14-day liquidity operation, raising questions about a possible change in the way it manages the banking system’s cash flow. This marks the third consecutive fortnight — from April 17 to May 2 — where the RBI has not used this key tool. Traditionally, the 14-day operation is a core method the RBI uses to regulate how much money flows in and out of banks.
Instead of the usual method, the RBI has been using shorter and more flexible cash infusions, such as daily or five-day operations, depending on the need. This shift suggests the central bank might be adjusting its strategy to better respond to changing liquidity conditions in the financial system, especially amid evolving market dynamics and fund flows.
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