RBI's Liquidity Tightrope: Absorbing a $136B Forex Tsunami While Global Bond Yields Surge Past 7%

The RBI deployed its biggest liquidity weapon — ₹1 lakh crore in OMO bond sales across three tranches this September — and the timing is deliberate, not desperate. Governor Sanjay Malhotra directly challenged critics who called the record $136.4 billion FCNR(B) forex deposit drive a costly exercise, arguing the dollars are deployed in overseas government securities that generate interest income for the central bank. "I don't see it as a cost," he said, urging observers...