{
  "id": 11114152,
  "title": "$133 bn inflow becomes an RBI rate decision factor",
  "url": "https://urgent.news/2026/10/01/133-bn-inflow-becomes-an-rbi-rate-decision-factor",
  "topic": "business",
  "section": "Business",
  "published": "2026-10-01T04:10:10.000Z",
  "source": {
    "name": "The Economic Times",
    "slug": "the-economic-times",
    "url": "https://economictimes.indiatimes.com/news/economy/policy/rbis-success-on-dollar-flows-fcnr-b-raises-stakes-in-inflation-fight-clamour-for-rate-hike-monetary-policy-meeting-next-week/articleshow/134607605.cms"
  },
  "original_language": "en",
  "account": "India's central bank received a record $133 billion inflow from the Indian diaspora, a development that may influence its upcoming monetary policy decision. The surge of cash left banks flush with funds, pushing overnight rates below the Reserve Bank's 5.25% policy rate. To counterbalance the excess liquidity, the RBI has already drained over 1 trillion rupees through bond sales and other measures.\n\nMarket participants anticipate further action from the RBI in the coming days as inflationary pressures rise due to increasing food and oil prices. A more hawkish RBI stance, combined with higher global bond yields, has driven Indian yields sharply higher and unsettled investors. If the headline figure continues to climb toward the RBI's 2%-6% target band while surplus cash remains high, draining liquidity may not suffice, according to Sneha Pandey, a fixed income fund manager at Quantum AMC.\n\nEconomists at Nomura Holdings Inc., Deutsche Bank AG, and Australia and New Zealand Banking Group predict the RBI will hike interest rates for the first time since early 2023 next week. Some economists have even brought forward calls for a move in December. The market currently prices in four hikes over the next year, compared to three at the end of June.\n\nWhile the RBI's liquidity interventions have been effective, they have also increased the cost of managing future currency risks. Citigroup economists suggest the RBI should gradually steer overnight rates toward the repo rate through short-term FX swaps and other interventions, with bond sales as an additional option. Citi expects up to 1 trillion rupees of bond sales as a potential tool for draining liquidity. However, if other measures fail to absorb sufficient liquidity, the RBI may resort to raising the cash reserve ratio as a last resort.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}