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 2022Banks 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 2020The repo rate or the repurchase rate is the rate at which RBI lends money to banks, when banks face shortage of funds
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1 min read7 Jun 2017As 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 2017The Union Budget contains details about the estimated receipts and the expenditure of the government for a particular fiscal year. The Budget is allotted for the upcoming fiscal year, which runs from 1st April to 31st March of the next year. Here is a quick guide on how the Union Budget is prepared