India's central bank is engaging in discussions with traders about the liquidity conditions in the banking system, leading to speculation about potential measures to improve liquidity during the upcoming policy review on December 6.

The Reserve Bank of India (RBI) is particularly concerned about the impact of significant foreign outflows from stocks and bonds on cash availability. These discussions, which are part of the RBI's regular interactions with market participants, have become more important given the current market dynamics.

Traders have observed that the central bank's inquiries indicate a proactive approach to managing liquidity in response to changing economic conditions.