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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.
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