It’s the ongoing Quantitative Tightening (QT) exercise, where global central banks are withdrawing excess money they printed in the past two years. The largest 10 economies added USD 23 trillion, of which the US Federal Reserves’ balance sheet alone doubled to USD 9 trillion. Long-term bonds have fixed rates, while interest on reserves (money that banks park with central banks) changes with monetary policy rate. The RBI’s balance sheet grew by an unprecedented Rs 12 lakh crore during the pandemic year FY20 and Governor Shaktikanta Das, who began shrinking the balance sheet last October, has finished the exercise. The RBI’s balance sheet grew by an unprecedented Rs 12 lakh crore during the pandemic year FY20 and Governor Shaktikanta Das, who began shrinking the balance sheet last October, has finished the exercise.

Source: Indian Express September 25, 2022 05:42 UTC