JP Morgan has said India's liquidity is expected to go into its normal state of deficit from current surplus.
The global financial services firm also said the government will cut spending to meet the fiscal deficit target.
"Government will also build back its cash balances", it said.
Deficit would preclude any large OMO sale, the bank added.
Future RBI liquidity management will be mainly through FX forward interventions, JP Morgan predicted.
Overall banking system liquidity deficit to average Rs 50,000 crore ($8.12 billion) through the rest of 2014-15. Overnight call will thus trade at close to repo rate, JP Morgan said.
($1= Rs 61.5400)
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