Reserve Bank to sell bonds and raise bank reserve rules to manage cash

The Reserve Bank of India plans to sell bonds worth 2.6 billion dollars to better manage money supply inside the banking system. Banks will also face a stricter cash reserve ratio requirement starting October 16 to give the central bank tighter control over cash levels.

Context

Central banks like the Reserve Bank of India use tools like bond sales and reserve requirements to manage the flow of money in the economy and keep price growth in check. These steps follow recent policy rate changes by the central bank as part of its broader financial strategy.