Economics · Monetary Policy
Regarding the monetary policy framework and liquidity tools of the RBI, consider the following statements: I. The Standing Deposit Facility (SDF) absorbs surplus liquidity but requires collateral from banks. II. The Marginal Standing Facility (MSF) rate is the upper bound of the policy corridor used for emergency overnight borrowing by banks. III. SDF replaced the reverse repo rate as the RBI's primary liquidity absorption tool and operates without collateral. Which of the above statements is/are NOT correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1II only
- 2II and III only
- 3I only✓
- 4I, II and III
Correct answer
I only
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