In bid to secure adequate liquidity to the troubled financial markets, RBI governor Shaktikanta Das has said that the central bank will conduct the fifth tranche of the long-term repo operations (LTROs) for Rs 25,000 crore on March 18. The issue will have a three-year tenor. The RBI has already conducted four rounds worth Rs 1 lakh crore since February 14 with huge success as the issue has been overbought multiple times. The RBI said based on further review of evolving liquidity conditions, more LTROs will be announced separately.
Das also announced the details of the second dollar-rupee swap for $2 billion on March 23. Taking into consideration the requirement of US dollars in the market, it has been decided to undertake another 6-month dollar sell/buy swap auction to provide liquidity to the forex market for $2 billion. The first such swap was conducted on March 16 for $2 billion and both the measures are to shore up liquidity which even though is huge surplus to the tune of Rs 3 lakh on a daily basis.
RBI governor has stated that it is important to ensure that policy actions and policy reactions are carefully considered and calibrated so as to assuage sentiment and instill confidence. In this context, the Reserve Bank has been taking several calibrated measures over the past few days to ensure that financial markets and institutions remain sound and resilient and also to build confidence more generally in the financial system.