Money Market Operations as on
The Reserve Bank of India outlined money market operations covering uncollateralized transactions and liquidity adjustments, including refinance facilities and foreign exchange risk reserves.
The Reserve Bank of India (RBI) released details of money market operations, covering uncollateralized transactions with tenors ranging from 2 to 14 days and 15 days to one year. These operations form part of the RBI’s liquidity management framework, ensuring adequate funding availability for banks and financial institutions. The RBI also included refinance facilities extended by it, which provide additional liquidity support to eligible institutions during periods of stress.
Net liquidity was calculated using a formula that aggregates repo, marginal standing facility (MSF), and standing liquidity facility (SLF) while subtracting reverse repo and standing deposit facility (SDF). This calculation reflects the RBI’s approach to assessing systemic liquidity conditions and guiding monetary policy decisions. The framework has been periodically updated, with the latest guidelines referenced in Press Release No. 2025-2026/1201 dated September 30, 2025.
The RBI’s operations also incorporate foreign exchange risk reserves as outlined in circulars RBI/2026-27/292 and RBI/2026-27/293 dated October 10 and October 12, 2026, respectively. These reserves are designed to mitigate risks associated with foreign exchange transactions, enhancing stability in the financial system. The inclusion underscores the RBI’s focus on managing cross-border risks alongside domestic liquidity conditions.
The RBI’s notification RBI/2025-26/148 DOR.RET.REC.354/12.01.001/2025-26 dated December 11, 2025, provides the regulatory basis for these operations. The framework ensures transparency and consistency in money market activities, supporting the RBI’s broader objectives of maintaining financial stability and efficient liquidity distribution across the banking sector.