Overall financial conditions remained benign in October (up to 16th), after remaining mildly tight in the latter half of September, primarily due to easing in the money, equity and corporate bond markets.

System liquidity remained in surplus during the second half of September and in October (up to 16th), although an increase in government cash balances, driven by advance tax and GST collections, briefly pushed it into deficit during September 22-24.

Since then, government spending and the release of primary liquidity from the 25 bps reduction in the cash reserve ratio25 restored liquidity to surplus conditions.

Overall, average net absorption under the liquidity adjustment facility declined to ₹1.0 lakh crore during September 16 to October 16, 2025, from ₹2.6 lakh crore in the preceding one-month period.

To offset the liquidity tightness during this period, the Reserve Bank conducted 14 variable rate repo auctions (overnight to 6-day maturity) to inject liquidity and align overnight money market rates with the policy repo rate.

With overall liquidity conditions in surplus, the average balances under the standing deposit facility remained elevated, and banks' recourse to the marginal standing facility stayed low.

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