The currency appreciation was getting quite alarming at the time and required urgent policy responses on our part. The ORR allowed us to address not only the growing appreciation of the rupee but to build up our reserves which crossed the Rs100-billion threshold in May 2013. We are today well on our way to achieve the target of six months’ import cover.
The ORR resulted, however, in excess rupee liquidity in the domestic money market and the Bank had to conduct open market operations to mop up the surplus. We had to complement the issue of Government securities with our own paper which reached a record level of almost Rs19 billion. This came with a cost and weighed heavily on the Bank’s balance sheet.