Money Market Operations as on July 31, 2026

The Reserve Bank of India's Money Market Operations report for July 31, 2026, offers a revealing snapshot of India's short-term liquidity landscape and the central bank's active role in steering monetary conditions. On this day, the overnight segment recorded a total volume of ₹16,132.08 crore at a weighted average rate of 5.28%, operating within a range of 3.50% to 5.60%. This segment comprises four key instruments: Call Money (₹1,459.85 crore at 5.15%), Triparty Repo (₹7,458.30 crore at 5.26%), Market Repo (₹250.48 crore at 3.90%), and Repo in Corporate Bonds (₹6,963.45 crore at 5.39%). The dominance of Triparty Repo and Corporate Bond Repo — together accounting for nearly 90% of overnight volume — underscores the growing sophistication and collateralization of India's money markets, a transformation accelerated post-2008 global financial crisis and reinforced by RBI's 2018 introduction of the Triparty Repo platform through CCIL (Clearing Corporation of India Ltd). The term segment tells an even more compelling story. Notice Money saw ₹12,696.80 crore at 5.37%, while Term Money stood at ₹445 crore with rates between 5.65%-6.15%. But the standout figures are in the term repo operations: Triparty Repo at a staggering ₹4,65,720.80 crore (5.20%) and Market Repo at ₹1,79,311.33 crore (5.16%). These massive volumes reflect banks' preference for secured, collateralized lending over unsecured call money — a structural shift encouraged by RBI's regulatory framework under the Banking Regulation Act, 1949, and the RBI Act, 1934. Now, the RBI's own operations reveal the real policy signal. The Marginal Standing Facility (MSF) saw a modest ₹604 crore availed at 5.50% for 1-day tenor, while the Standing Deposit Facility (SDF) absorbed a colossal ₹2,44,708 crore at 5.00%. This asymmetry — huge surplus parking at SDF versus minimal borrowing at MSF — is the hallmark of a 'surplus liquidity' regime. The SDF, introduced in April 2022 as part of the revised LAF corridor (replacing the fixed reverse repo rate), serves as the floor of the interest rate corridor, with MSF as the ceiling (5.50%) and the policy repo rate (likely 5.25% at this juncture) in the middle. The fact that banks parked over ₹2.44 lakh crore at SDF — earning 5.00% — instead of lending in the market at 5.28% weighted average, signals abundant liquidity, possibly driven by sustained government spending, forex inflows, or RBI's open market operations (OMOs). Constitutionally, RBI's monetary authority flows from the RBI Act, 1934 (Section 45ZB establishes the Monetary Policy Committee under Article 293's financial stability mandate), while its regulatory powers over banks derive from the Banking Regulation Act, 1949. The shift to a floor-based corridor (SDF as floor) aligns with global best practices and the recommendations of the Urjit Patel Committee (2014) on monetary policy framework. The significance for India is profound. Persistent surplus liquidity, while comfortable for financial stability, poses challenges: it can dampen monetary transmission, fuel asset bubbles, and complicate inflation targeting (mandated at 4% ±2% under the 2016 RBI Act amendment). For aspirants, this data illustrates the practical operation of India's inflation-targeting framework, the evolution of money market instruments, and the central bank's balancing act between growth, inflation, and financial stability. Going forward, if surplus liquidity persists, RBI may resort to variable rate reverse repos (VRRR), OMOs (sale of securities), or even CRR hikes to absorb excess — tools that aspirants must master for exams like UPSC, RBI Grade B, and banking recruitment tests.