Discuss the market operations used by the Reserve Bank of India for operationalising the monetary policy.

The Reserve Bank of India operationalises its monetary policy through its operations in government securities, foreign exchange and money markets. Open Market Operations: Open Market Operations in the form of outright purchase/ sale of Government securities are an important tool of the Reserve Bank's monetary management. The Bank carries out such operations in the secondary market on the electronic Negotiated Dealing System - Order Matching (NDS-OM) platform by placing bids and/or taking the offers for securities. Liquidity Adjustment Facility Auctions: The liquidity management operations are aimed at modulating liquidity conditions such that the overnight rates in the money market remains within the informal corridor set by the repo and reverse repo rates for the liquidity adjustment facility (LAF) operations. In a repo transaction, the Reserve Bank infuses liquidity into the system by taking securities as collateral, while in a reverse repo transaction it absorbs liquidity from the system with the Reserve Bank providing securities to the counter parties. Market Stabilisation Scheme: The Market Stabilisation Scheme (MSS) was introduced in April 2004 under which Government of India dated securities/treasury bills could be issued to absorb surplus structural/ durable liquidity created by the Reserve Bank's foreign exchange operations. MSS operations are a sterilisation tool used for offsetting the liquidity impact created by intervention in the foreign exchange markets.