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Difference Between Reverse Repo Rate and Standing Deposit Facility? | Mint Primer

In April 2022, the Reserve Bank of India (RBI) launched the standing deposit facility (SDF) as a mechanism to curb inflation by absorbing liquidity. The ‘Expert Committee to Revise and Strengthen the Monetary Policy Framework’ advocated the SDF as a liquidity management tool in January 2014. However, Section 17 of the RBI Act of 1934 was modified in 2018 to allow the RBI to introduce this instrument, which was now brought into action in 2022. The central bank's decision to deploy SDF raises a significant dilemma, though, as the reverse repo rate can also be used to absorb liquidity. Let us start this discussion by explaining what is a SDF and how it is different from a reverse repo facility. #reversereporate #standingdepositfacility #rbi #finance #mint Subscribe Now For Latest Updates- https://tinyurl.com/lbw8nze

13 Dec 2022
Money

RBI is saying: lend please. Banks are saying – no no no, money with you is safer

Banks globally are not transmitting the money that central banks are providing to businesses that need the moneyThe US Federal Reserve has taken to buying corporate bonds directly rather than through banks. RBI has not gone this far

4 min read17 Apr 2020
Money

Explained: What are repo and reverse repo rates?

The repo rate or the repurchase rate is the rate at which RBI lends money to banks, when banks face shortage of funds

1 min read18 Dec 2018
Politics

No bias in MPC to raise interest rates, decision should be guided by hard data: Subhash Chandra Garg

A majority of the six-member RBI monetary policy committee flagged upside risks to inflation as it kept the benchmark repurchase rate unchanged at 6% at the 4-5 April meet

1 min read6 May 2018
Market

RBI to take hawkish stance by end-2018, to hike rates early next year

All 61 economists expect the Reserve Bank of India (RBI) to hold the repo rate at 6% and the reverse repo rate at 5.75% at its 4-5 April monetary policy meeting

3 min read30 Mar 2018
Industry

CPI inflation to trend higher, chances of rate hike rising

The minutes from the 7 February meet of RBI's Monetary Policy Committee shows there was broad consensus that risks to inflation are clearly tilted to the upside

1 min read26 Feb 2018
Industry

RBI, wary on inflation, set to keep rates on hold

The RBI, after a two-day meeting on Wednesday, is likely to reiterate concern about inflation, as the annual rate increased to 3.58% in October

2 min read5 Dec 2017
Industry

PBOC injects most funds since January to offset cash squeeze

China's central bank PBOC boosted the supply of cash in the financial system to the most since January

1 min read17 Jun 2017
Market

A liquidity check for monetary policy doves

Demands for a rate cut have risen in the past fortnight, especially with the latest inflation print coming way below the 4% target RBI has set

1 min read7 Jun 2017
Opinion

Expect a less hawkish RBI, but the monetary policy stance may not change

As long as the liquidity is not posing a threat to inflation, RBI will not be in a hurry to raise the policy rate

5 min read5 Jun 2017
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