The Reserve Bank of India (RBI) has implemented measures to control excess liquidity in the financial system as part of its efforts to combat rising inflation. The move comes amidst concerns about the economy’s overheating and the need to stabilize prices. By utilizing tools like the Cash Reserve Ratio (CRR) and the Market Stabilization Scheme (MSS), the RBI aims to drain surplus funds from the banking system, reducing the risk of inflationary pressures. These steps are in line with the RBI’s dual mandate of maintaining price stability and fostering economic growth. The decision reflects the central bank’s proactive approach to ensure that liquidity remains balanced, thereby supporting its inflation management objectives and overall economic stability.