<h1>RBI Tightens Liquidity to Raise Short-Term Rates, Stabilize Exchange Rate; Relaxes SLR Requirements for Banks' Flexibility.</h1> The Reserve Bank of India (RBI) announced measures to address market conditions by tightening liquidity to raise short-term interest rates, aiming to stabilize the exchange rate. The RBI plans to conduct open market operations to purchase long-dated government securities and will adjust these operations based on market conditions. To mitigate banks' mark-to-market losses due to abnormal market conditions, the RBI has temporarily relaxed statutory liquidity ratio requirements, allowing banks to retain a higher percentage of securities in the held-to-maturity category. Banks can also transfer securities between categories and spread net depreciation over the current financial year. Further instructions will follow.