New Delhi, Jan. 22 -- In a pre-policy interaction with the Reserve Bank of India (RBI), economists and market participants broadly converged on one message: the central bank should focus on easing liquidity in the banking system rather than cutting interest rates, two economists and two treasury officials told Mint.

With growth and inflation seen as largely stable, the discussion centred on tools to address liquidity, which have remained under strain due to persistent RBI intervention in the foreign exchange market to curb excessive rupee volatility, strong credit growth, and advance tax outflows.

RBI's Monetary Policy Committee will meet on 4-6 February, which will be its last such meeting of the current financial year. After deliverin...