RBI Sets WMA Limit: Navigating Fiscal Waters with Precision
The Reserve Bank of India has set the Ways and Means Advances limit for the central government at Rs 50,000 crore for the latter half of FY 2025-26. The decision, in collaboration with the Government of India, aims to manage fiscal mismatches efficiently while allowing borrowing adjustments in response to prevailing conditions.
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- India
The Reserve Bank of India (RBI) announced on Friday the capping of Ways and Means Advances (WMA) for the central government at Rs 50,000 crore for the second half of the fiscal year 2025-26.
WMA are temporary loans provided by the RBI to the central and state governments, as well as Union Territories, to address short-term discrepancies in receipt and payment flows. Determined in consultation with the Government of India, the RBI noted its prerogative to adjust this limit based on the economic environment.
At the same time, the central bank hinted at additional market loans if the government exhausts 75% of the WMA limit. Currently, the government's borrowing plan for the second half of the year stands at Rs 6.77 lakh crore, slightly trimming the annual borrowing forecast.
(With inputs from agencies.)
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