The Reserve Bank of India (RBI) governor Shaktikanta Das, while announcing the MPC policy, said that the stance of liquidity management continues to be accommodative and in consonance with monetary policy.

Share Market Live

NSE

"RBI has proactively taken steps to insulate domestic financial markets from global stress and unpredictability," he said.

He added that the central bank remains committed to ensuring there is ample liquidity in the financial system.

RBI's MPC said that CRR normalization opens up space for a variety of market operations to inject market liquidity.

The central bank announced its monetary policy today after a three-day policy meet. The central bank held the repo rate at 4 percent and keep the stance accommodative, in the first policy after Budget 2021. The Reserve Bank's rate-setting Monetary Policy Committee (MPC) began its meeting on Wednesday.

After the virus outbreak, the RBI had allowed large surplus liquidity to persist in the banking system and aligned daily liquidity management operations to ensure banks had access to funds as and when needed, leading to large surpluses.

It earlier said it was keen to restore operations gradually to normal and announced short-term variable rate reverse repos as a first step towards managing the surplus.

First Published:Feb 5, 2021 10:20 AM IST