A rate cut must be work in progress at RBI: R Gandhi

Gandhi RBI
We have to wait for a few days I suppose. RBI should certainly be taking action on the rate front.
Pumping in cheap liquidity right now is not what the market needs to see, it is not what India Inc needs to see. They need to see a direct rate cut. What is your view on these liquidity measures?
See, there are many things to be done, I agree. But it does not mean they all have to be announced in a single day. This is work in progress, I suppose. They have to take care of everything. In any case, RBI comes out with any liquidity-related announcements, whether they are responding on other occasions or when it wants to absorb based on its assessment of future cash flows for the banking system as a whole over the next few days. If it is going to pump in Rs 1 lakh crore additionally through variable term repo for two weeks, 16-day tenure, that means that it has kind of assessed the need for such additional money in the next few days. That could be flows for whatever purposes, whether it is for the government or for the system as a whole.

Now that this variable rate auction has been announced, it is basically because RBI has been assessing the need for this sort of liquidity demand. They have been getting feelers perhaps from the borrowers.
RBI always makes estimates about future liquidity positions, one or two weeks or one month in advance. So basically, it knows because it has better information than the market. It will definitely be able to zero in on when there is a need for additional funds. On month ends and year ends, certain blips always happen in terms of liquidity. So anticipating what RBI has announced should be seen from that angle, rather than saying we expected something more but that has not been done yet. That we have to wait for a few days I suppose. RBI should Certainly be taking action on the rate front.