2024 · Q117
Consider the following statements regarding instruments of monetary policy:
- 1Standing deposit facility (SDF) rate was introduced in April 2022.
- 2SDF rate replaced fixed reverse repo rate as the floor of the LAF corridor.
Which of the statements given above is/are correct?
General KnowledgeIndian Economy
- A1 only
- B2 only
- CBoth 1 and 2
- DNeither 1 nor 2
Explanation
Statement 1 is correct: the Standing Deposit Facility (SDF) rate was introduced by the RBI in April 2022 as an additional tool for absorbing liquidity without collateral. Statement 2 is correct: the SDF rate replaced the fixed reverse repo rate as the floor of the Liquidity Adjustment Facility (LAF) corridor. Both statements are correct, so the answer is (C).