The domestic scenario Liquidity Let me first address the immediate concern about Rupee liquidity, which, in some ways, is related to the external situation.
For several weeks now, the tightness of domestic liquidity conditions has been highlighted by the fact that borrowing under the Liquidity Adjustment Facility (LAF) have been significantly above our comfort threshold of one per cent of Net Demand and Time Liabilities (NDTL). Recent developments in our liquidity management approach have involved making a distinction between the monetary stance and the liquidity stance (Chart 2).