Economics · Monetary Policy and Banking
Consider the following statements with reference to the monetary policy operations of the Reserve Bank of India (RBI): I. It can absorb surplus liquidity from the banking system through reverse repo operations. II. Under the Liquidity Adjustment Facility framework, the Standing Deposit Facility (SDF) rate operates as the upper bound of the policy corridor. III. Under India's inflation-targeting framework, the upper tolerance level for headline inflation has been fixed at 4 per cent. Which of the statements given above is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1None
- 2I, II and III
- 3I only✓
- 4I and II only
Correct answer
I only
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