In brief, currently in its monetary operations, the Reserve Bank uses multiple instruments to ensure that appropriate liquidity is maintained in the system, consistent with interest rate policy and the objective of price stability, so that all legitimate requirements of credit are met.
Towards this end, the Bank pursues, inter alia, a policy of active management of liquidity through open market operations (OMO) including Liquidity Adjustment Facility (LAF), Market Stabilization Scheme (MSS) and cash reserve ratio (CRR), and deploys the policy instruments at its disposal, flexibly, as warranted by the situation.