Consider the following statements regarding instruments of monetary policy : 1. Standing deposit facility (SDF) rate was introduced in April 2022. 2. SDF rate replaced fixed reverse repo rate as the floor of the LAF corridor. Which of the statements given

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Q: 42 (CDS-I/2024)
Consider the following statements regarding instruments of monetary policy :
1. Standing deposit facility (SDF) rate was introduced in April 2022.
2. SDF rate replaced fixed reverse repo rate as the floor of the LAF corridor.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

question_subject: 

Economics

question_exam: 

CDS-I

The Standing Deposit Facility (SDF) was introduced on April 8, 2022, by the Reserve Bank of India. It was established as a tool to absorb excess liquidity and was set at 25 basis points below the policy repo rate. The SDF rate replaced the fixed reverse repo rate as the floor of the Liquidity Adjustment Facility (LAF) corridor, making both statements in the question correct.