Archive · 28 Dec 2025
RBI Infuses Liquidity to Stabilize Bond Markets
The Reserve Bank of India (RBI) has been putting money into the system to help bond markets.
Bond yields, which show how much it costs to borrow money, have been high, and the RBI is buying bonds to make borrowing cheaper.
They are also doing a dollar swap to add more money.
The system is short on money because people are selling bonds and taxes are taking money out.
The RBI thinks they might need to add even more money soon.
The government should also spend more to help.
Banks need to make savings accounts more attractive by offering better interest rates.
RBI is buying bonds worth 2 lakh crore in four tranches to infuse liquidity.
Bond yields have hit a nine-month high of 6.67% despite a 125 bps repo rate cut.
Foreign portfolio investors have been selling bonds, contributing to liquidity shortages.
Tax outflows and RBI's dollar sales to support the rupee have reduced liquidity.
Aggregate borrowing in the March quarter is estimated at 8.1 lakh crore, with states borrowing 5 lakh crore.
- Who
- Reserve Bank of India (RBI)
- What
- Infused liquidity into the system to stabilize bond markets
- When
- Current quarter, with projections for the March quarter
- Where
- India
- Why
- To address liquidity shortages and stabilize bond yields
- Bond Yields
- 6.56%
- Liquidity Deficit
- 85,000 crore
- Bond Purchases
- 2 lakh crore in four tranches
- Dollar Swap
- $10 billion
- FPI Net Selling
- 11,000 crore in December
- Tax Outflows
- Advance tax and GST payments
- Aggregate Borrowing
- 8.1 lakh crore in March quarter
- Deposit Growth
- 10.2% year-on-year as of end-November
Sources
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