India's Reserve Bank of India (RBI) has indicated that it will be essential to maintain overnight rates closer to the key policy rate. The central bank maintains that the weighted average call rate (WACR) is its operative rate and aims to keep it as close to the policy repo rate as possible. Maintaining liquidity surplus in a range of 0.6% to 1.1% of deposits is likely to keep the spread between the WACR and the policy rate between 5-10 basis points. However, a liquidity deficit in the range between 0.4% and 0.7% of deposit is likely also likely to maintain the WacR above the policy rates.