The Reserve Bank of India has announced its third tranche of liquidity support measures as the Indian rupee touched a new record low against the US dollar. The central bank's latest intervention comes amid mounting pressure from foreign capital outflows and deteriorating market conditions.

Latest Liquidity Measures

The RBI outlined a comprehensive package of operations to support market liquidity:

The central bank stated it will "continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions." The 90-day Variable Rate Repo operation represents a liquidity tool where banks borrow funds at market-determined rates through an auction process, rather than the fixed repo rate.

Escalating Intervention Scale

This marks the third such liquidity package since December 2025, demonstrating the RBI's increasingly aggressive approach to market support. The progression of interventions shows the mounting pressure on the financial system:

• First tranche (December 2025): OMO purchases worth ₹1 trillion and dollar-rupee swap of $5 billion
• Second tranche (late December): Doubled operations to ₹2 trillion OMO purchases and $10 billion swap auction for January 2025
• Third tranche (current): Additional ₹50,000 crore purchases and ₹25,000 crore VRR operation

Governor Sanjay Malhotra had previously reiterated the RBI's commitment to supporting system liquidity during the post-policy conference, though without providing clear direction on future measures.

Rupee Under Severe Pressure

The regulatory announcement followed the Indian rupee's intraday plunge to a record low of 91.97 against the US dollar, before recovering slightly to close at 91.96. This surpassed the previous all-time low of 91.75 recorded on 21 January.

Foreign institutional investors have intensified their selling, with net outflows of ₹36,587 crore in 2025. The benchmark indices recorded nearly 1% losses for the day and approximately 2.5% for the week, adding to rupee pressure.

Market Demands and System Constraints

Market participants have consistently urged the RBI to provide more durable liquidity solutions, as conditions remain tight despite multiple intervention rounds. System liquidity faces additional pressure from substantial government borrowing, expected to reach around ₹30 trillion from central and state governments.

In pre-policy interactions reported on 22 January, economists and market participants suggested the RBI prioritize liquidity easing over interest rate cuts. Key recommendations included:

• Publishing an indicative OMO calendar up to ₹5 trillion for the next financial year
• Implementing longer-term Variable Rate Repos for sustained relief
• Considering targeted long-term repo operations (TLTRO)

Upcoming Policy Decision

The RBI's Monetary Policy Committee is scheduled to meet on 4-6 February for its final meeting of the current financial year. The central bank has implemented a cumulative 25 basis points reduction in the policy repo rate since February 2025, as it balances growth support with currency stability concerns.

Central Bank of India is preparing to maintain operational continuity as its union has announced a one-day strike scheduled for January 27, 2026. The bank has assured stakeholders that it will implement measures to ensure smooth operations during the planned industrial action.

Strike Announcement and Bank's Response

The union representing employees of Central Bank of India has formally proposed a one-day strike for January 27, 2026. In response to this announcement, the bank has committed to ensuring that its operations continue without significant disruption to customer services.

Operational Preparedness

Central Bank of India's management is focusing on maintaining service continuity during the proposed strike period. The bank's proactive approach demonstrates its commitment to minimizing any potential impact on banking operations and customer experience.

Industry Context

This development reflects the broader landscape of labor relations within India's public sector banking industry. Banks typically implement contingency plans during such events to maintain essential services and minimize disruption to their customer base.

The bank's emphasis on operational continuity suggests that management is taking proactive steps to address the situation while the union exercises its right to organize industrial action.