ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Liquidity Management Gaining Ground

Before the global financial crisis, central bankers depended mainly on interest rates in policymaking and operations; in the post-crisis period when liquidity became a binding constraint, liquidity management assumed an equally important place. In India, ever since 2001, liquidity management has been playing an equally important role along with interest rates as part of the operating framework of monetary policy under what is now called the augmented multiple indicator approach. In the present context the Reserve Bank of India should continue to exercise a tight leash on liquidity, but at the same time ensure that the flow of credit to industry and other economic activities is revived.

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