The Reserve Bank of India (RBI) did not compromise on its balance sheet while providing liquidity to the bond market through asset purchases, governor Shaktikanta Das said on Thursday.
The central bank, so far, this fiscal, has purchased over Rs 3 trillion of central and state government bonds from the secondary market to provide liquidity to the system.
Unlike many central banks, though, the RBI’s asset purchases “did not dilute its balance sheet and hence, did not compromise on core principles of central banking.”
The purchases were risk-free government bonds only, he said.
"The focus was to foster congenial financing