On 27 April, the Reserve Bank of India (RBI) announced a relaxation in norms (all-in costs and eligible borrowers) for external commercial borrowings (ECBs). On 1 May, RBI announced some relaxation in norms for investment by foreign portfolio investors (FPIs) in Indian debt. FPIs can now buy bonds with residual maturity of less than one year across government and corporate issuers, subject to a ceiling of 20% investment by that FPI across all categories of bonds. On 4 May, RBI announced that it would conduct open market operations (OMOs) to the tune of Rs10,000 crore. Through OMOs, the central bank buys government bonds and credits the accounts of the banks from which it buys. It will help increase liquidity. In a research note published on 8 May, economists at JP Morgan India estimate that the cash-to-gross domestic product (GDP) ratio is rising, presumably due to improvement in the rural economy. This demand for cash is unlikely to be met by the RBI buying foreign exchange and letting domestic money circulation rise because India does not expect strong foreign currency inflows this year. Even though net portfolio investment flows have been much stronger at $19.84 billion, the high and rising trade deficit and the persistence of oil price over $70 per barrel will see to that. On a net basis, foreign direct investment (FDI) as per RBI balance of payments (BoP) statistics, for the first nine months of 2017-18, amounted to $23.73 billion-lower than the $30.57 billion for the same period in 2016-17. Finally, in September 2017, RBI reported that India's external debt with residual maturity of less than one year amounted to about $120 billion, net of non-resident Indian deposits. Hence, the RBI has to engage in OMOs to the tune of Rs1.1 trillion in the current financial year, according to JP Morgan. Generally, the money demand function is hard to estimate. Hence, money demand is only indirectly perceived through money supply. Base money expansion happens based on assumptions of nominal GDP growth, velocity of circulation of money, mainly. If the central bank perceives the need to do OMO, then, it is a sign that it is accommodating demand for cash, rather than letting interest rates rise.