Monetary skew: RBI must not let its liquidity moves work against its rate-setting panel’s decisions
Also, as the lender of last resort, RBI is expected to fix inter-bank liquidity mismatches that cannot be met by the overnight call money market. Yet, trouble arises when RBI’s moves, especially attempts to induce durable rather than temporary liquidity, result in undoing or offsetting the effect of the MPC’s rate decisions.
