India’s financial markets opened with a cautious tone on July 10, 2025, as the rupee slipped and the Reserve Bank of India (RBI) released its latest money market operations data, offering a glimpse into the liquidity dynamics shaping monetary policy.
	 
	Currency Movement
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		The Indian rupee opened down 0.2% at 85.8250 per US dollar, compared to the previous close of 85.6350.
 
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		The decline reflects global dollar strength and cautious sentiment ahead of upcoming inflation data and bond auctions.
 
	RBI Money Market Operations
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		Banks’ cash balances with the RBI stood at ₹9.32 trillion, indicating a robust reserve position across scheduled commercial banks.
 
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		Government surplus cash balance with the RBI was nil, suggesting active fiscal deployment and no excess funds available for auction.
 
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		Refinance operations totaled ₹55.16 billion, reflecting moderate liquidity support extended by the central bank.
 
	Liquidity Context
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		The RBI has been actively managing surplus liquidity through Variable Rate Reverse Repo (VRRR) auctions, with recent drawdowns exceeding ₹1 trillion.
 
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		Despite these efforts, system liquidity remains elevated due to strong government spending and forex interventions.
 
	Market Implications
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		The rupee’s weakness may prompt further RBI action to stabilize shortterm rates.
 
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		Bond traders are watching closely for signals on rate direction, especially as durable liquidity injections continue to shape yield curves.
 
	Sources: Reuters, Reserve Bank of India, Economic Times, Business Standard, Investing.com.