Sen Gupta, Indranil et al. creator text xu| 2000 continuing ng p.291-321. The management of liquidity poses a major challenge to the conduct of monetary policy in an environment of financial liberalisation. Recent research has attempted to assess liquidity conditions in the market for bank reserves in terms of central bank balance sheet flows. This paper constructs the concepts of autonomous liquidity (AL) and discretionary liquidity (DL) in the Indian context and finds that there is a systemic response in the Reserve Bank's discretionary operations to offset `autonomous' shocks to the market for bank reserves. - Reproduced. Money Liquidity Reserve Bank of India Occasional Papers 180718