The RBI's Money Market Operations page publishes daily data on Liquidity Adjustment Facility transactions — repo, reverse repo, Standing Deposit Facility, and Marginal Standing Facility — alongside open market operations and variable rate auctions. These tools form the LAF corridor through which the RBI injects or absorbs liquidity from the banking system, keeping the weighted average call money rate anchored near the policy repo rate set by the Monetary Policy Committee.

The LAF corridor is the architectural spine of India's monetary policy transmission. It consists of three key rates: the Standing Deposit Facility (SDF) rate at the floor, the policy repo rate at the centre, and the Marginal Standing Facility (MSF) rate at the ceiling. Banks park surplus liquidity with the RBI at the SDF rate and borrow emergency funds at the MSF rate, creating a band within which overnight interbank rates must stay.

Before 2022, the fixed reverse repo rate served as the corridor floor. The SDF was introduced in April 2022 as a more flexible absorbing tool — unlike reverse repo, it does not require the RBI to provide collateral to banks, giving the RBI greater control.

The repo rate is the rate at which RBI lends to commercial banks against government securities via overnight or term repos. When the MPC raises the repo rate, the entire corridor shifts upward, making borrowing costlier for banks, reducing credit expansion, and cooling inflation. The reverse works during easing cycles.

Variable Rate Repo (VRR) and Variable Rate Reverse Repo (VRRR) auctions allow the RBI to fine-tune liquidity beyond fixed-rate windows. Open Market Operations (OMOs) — outright purchase or sale of government securities — provide durable liquidity management over longer horizons.

For aspirants, understanding the transmission chain is critical: MPC decision → repo rate change → LAF corridor shift → call money rate moves → bank lending rates adjust → credit growth and inflation respond.