RBI’s Strategies To Increase Liquidity In Economy

The RBI makes monetary policy to attract retail investors to enter the stock market of the government securities market. RBI takes some tough steps to control Consumer Price Index (CPI) also to boost the liquidity.

RBS to detract retail investors to enter in the stock market of government Bond to ease the way for the same. Are main ensure liquidated to pay more funds to MSME sector or microfinance industry Institution and NBFC for PSU's also. RBI should attract FDI's also to make easy rules for business so that investors may attract and start investing the money in India so that the foreign currency come to India. In the recent RBI credit policy which was announced on February 22 RBI has an unchanged repo rate of 4% to boost or increase the liquidity of the Indian economy. RBI was also extended the time limit to NBFC to reduce their NPS's up to September 2022. RBI on an interval should monitor Consumer Price Index so that inflation can be controlled. In recent monetary policy RBI has targeted CPI for the year 2020-2023 to 6%. It may vary by 2% plus or minus.

RBI is also direct to SEBI to ease the rules for the stock market so that retail investors, mutual fund companies, foreign investors, or domestic funds may invest in huge amounts or participate. Last year and pandemic period that is 2021 RBI had played a very key role based on the action of RBI our FMC's companies and Pharma companies did a very good job and RBI could control inflation smoothly. In recent RBI monetary policy RBI has allowed retail investors to participate and enter the G-Sec market for the vast saving of domestic investors. It may be a game-changer in the future. RBI should motivate the export to give some benefit to export companies by increasing or easing export rules likewise increasing in percentage of duty drawback, low-interest rate funding, or cutting of expenses on shipping containers. I way should provide the PSU's or give capital for disbursal of loans to retail in easy ways also. In an overall view, RBI has to play a key role in increasing liquidity in income by taking the above steps.