How RBI could tackle a liquidity deluge triggered by dollar deposits
The RBI’s special dollar deposit scheme attracted a massive $127.23 billion, pushing India’s banking system liquidity surplus to a record ₹9.70 trillion. The central bank may deploy longer-term VRRR auctions, FX swaps, a market stabilisation scheme, CRR hikes or open-market bond sales to absorb excess liquidity and prevent inflationary pressures from building.