In its monetary operations, the Reserve Bank uses multiple instruments to ensure that appropriate liquidity is maintained in the system so that all legitimate requirements of credit are met, consistent with the objective of price stability.
Towards this end, the Bank pursues a policy of active management of liquidity through OMO including LAF, MSS and CRR, and using the policy instruments at its disposal flexibly, as and when the situation warrants. Way ahead Conduct of monetary policy is complex. It has not only to be forward looking but also to grapple with uncertain future.