India's central bank announced on Monday a host of measures to inject liquidity into the banking system, including bond purchases and dollar/rupee swaps, which analysts and traders said could be a precursor to a rate cut next month.

India’s central bank purchased a large quantum of bonds last week, with the monetary authority stepping in to ease a cash crunch that is currently at its widest level in more than a decade.

The Reserve Bank of India, on Monday, announced a slew of measures to inject liquidity into the banking system. The central bank will conduct Open Market Operation purchase auctions of government securities worth 600 billion rupees ($6.