OPEN MARKET OPERATIONS: EXPECTATIONS AND CHALLENGES

Authors

  • Dr. A. J. Haja Mohideen Associate Professor & Head, PG & Research Department of Economics, Jamal Mohamed College, Trichirappalli

DOI:

https://doi.org/10.21276/IERJ24877611004786

Keywords:

Liquidity, Monetary Policy, Speculation, Exchange Rate Volatility, Government Securities

Abstract

The RBI move of sucking out excess liquidity through OMOs clearly shows the tightening attitude to control inflationary pressures. Monetary policy got a hawkish tint as the market did not expect such a suck out policy of excess liquidity from the RBI, though the retail inflation was at 6.83 per cent in August 2023. Larger government borrowings and abundant supply of liquidity are the great concerns to RBI. The RBI's emphasis on active liquidity management was influenced by inflation risks and financial stability. Fiscal Dominance Liquidity Management Challenge and Exchange Rate Volatility are the challenges ahead. OMOs effectiveness depends on the central bank's ability to accurately time and size these operations.

References

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IV. Kumar, T. (2020, August 26). Macroscope: An assessment of Open Market Operations by RBI. Fisdom. https://www.fisdom.com/macroscope-an-assessment-of-open-market-operations-by-rbi-content-on-app/

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Additional Files

Published

15-01-2024

How to Cite

Dr. A. J. Haja Mohideen. (2024). OPEN MARKET OPERATIONS: EXPECTATIONS AND CHALLENGES. International Education and Research Journal (IERJ), 10(1). https://doi.org/10.21276/IERJ24877611004786