2024 · Q113
Which of the following indicators is/are used to observe the monetary transmission mechanism in economy?
- 1Weighted average lending rate
- 2Weighted average domestic term deposit rate
- 31-year median MCLR
- 4SDF rate
Select the correct answer using the code given below.
General KnowledgeIndian Economy
- A1 and 2 only
- B1, 2 and 3
- C3 and 4
- D4 only
Explanation
To observe monetary transmission - the pass-through of policy rate changes to bank lending and deposit rates - the RBI tracks the weighted average lending rate (WALR) on fresh and outstanding rupee loans (1), the weighted average domestic term deposit rate (WADTDR) (2), and the 1-year median MCLR of banks (3). The SDF (Standing Deposit Facility) rate (4) is a policy instrument - the floor of the LAF corridor - not an indicator of transmission. Hence 1, 2 and 3 are used. Cross-checked against testbook.com's CDS 21 April 2024 official paper solutions.