RBI projects up to Q2FY28 to mop up Rs 4 trillion excess liquidity
Economists say the Reserve Bank of India may need until the second quarter of FY 2027-28 to absorb a durable liquidity surplus of about Rs 4 trillion.
The RBI is expected to gradually remove the excess liquidity using open market operation sales and other tools. Around Rs 1 trillion could be cleared through OMO sales, while the remaining Rs 3 trillion would require additional durable liquidity-management measures such as sell-buy swaps. Analysts anticipate the process to extend into Q2FY28. This timeline reflects the scale of the surplus and the central bank’s cautious approach.
Why it matters
The timeline shows how long excess money may stay in the economy, affecting inflation and financial stability.
In this story
RBIliquidity surplusopen market operationssell-buy swapsQ2FY28Rs 4 trilliondurable surplusmonetary policy
