Since Sanjay Malhotra took over as the RBI Governor, the central bank’s stance has unmistakably shifted towards supporting growth. The dogged focus on retail inflation that defined RBI policy for over two years is now making way for a more flexible approach. The current liquidity crunch stems from multiple factors: global economic uncertainties, domestic credit pressures, and external market shocks. Left unchecked, these could snowball into a systemic financial crisis. The stakes are high. A fresh surge in liquidity could stoke inflationary pressures, undoing the RBI’s hard-won price stability. The question is whether what it has done on the liquidity front already is enough? As mentioned above, experts already pitch for an additional injection of Rs 2-3 lakh crore into the banking system to truly support growth. It looks like the RBI will continue to pump in more money to bridge the liquidity shortage in the system and thereby positively influence the credit growth to the productive sectors. It has announced fresh open market operations (OMO) worth Rs 1 lakh crore in two tranches (March 12 and March 18) and a USD/INR Buy/Sell Swap auction worth $10 billion on March 24. These moves are both strategic and urgent, given the fragility of the current financial landscape. The planned swap auction is another critical step to counter currency volatility, which, if mismanaged, could amplify domestic liquidity constraints.