RBI’s liquidity revamp is not QE
The new liquidity regime improves monetary transmission without excessive money creation
Some observers have described the Reserve Bank of India’s (RBI) revised liquidity management framework as quantitative easing (QE), Indian-style QE, QE-like or cautious QE. Unfortunately, all these descriptions are incorrect. So, what exactly has RBI announced, what are its implications, and why and where is the misunderstanding?