This comes amid a falling rupee, which has initiated several regulatory actions aimed at repatriating foreign inflows and cutting dollar payments related to imports.
People said the central bank also sought feedback on its July 6 move to liberalize foreign exchange inflows.
an executive director reserve Bank of India He is believed to have presided over the meeting, which was attended by representatives of about 18 banks, including public, private and foreign lenders.
The RBI did not officially comment on the meeting.
According to those present in the meeting, banks told the RBI that measures to boost foreign exchange inflows, be it external commercial borrowings or deposits from NRIs, would take time to come down.
The rupee fell to a new record low of $79.66 per dollar on Tuesday before closing at 79.60.
The dollar index, which measures the unit against a basket of major currencies, rose 12.3% this year amid the Russia-Ukraine conflict, which has caused supply disruptions.
In Europe, which is facing a recession, the euro currency has regained parity with the US dollar for the first time in more than 20 years. Europe’s local unit shook investors on Tuesday as concerns about the health of the global economy touched a new low of nearly $1.
Sources said bank treasury chiefs present at the meeting said India’s fundamental and macro parameters were resilient, the rupee would gain its prudent value and the macroeconomic situation would turn favorable for India in a quarter or two.
The rupee has fallen 6.6% so far this year, becoming the seventh-worst-performing Asian currency, compared to a 5.44% fall in the value of the Chinese renminbi against the dollar, Bloomberg data compiled by ETIG showed.
The central bank asked participants in the meeting about the trajectory of benchmark bond yields. Banks expect an average yield range of 7.75-8% for benchmark bonds this year.
The matrix, which provides a measure of pricing for bond sales, is an important parameter, especially as the central bank manages the finance ministry’s record fundraising of around Rs 14.31 lakh crore (gross).
The benchmark yield becomes important at a time when the US Treasury yield is rising.
The greater the difference between the two sovereign gauges, the better for the foreign portfolio investors.
So far this year, foreign funds have net sales of $1.87 billion in local debt securities.
An official who attended the meeting said, “The RBI wants to ensure liquidity of the rupee as it is going through a rate hike.
The banking regulator had started raising rates from May 4, when it hiked the benchmark repo rate by 40 basis points (bps) and followed it up with a hike of 50 bps next month.
Liquidity in the system plays a vital role in transmitting the benefits of those rate actions.
RBI data shows surplus liquidity in the system now stands at Rs 2.20 lakh crore as compared to Rs 5.71 lakh crore on May 4.