Q. Arrange the following policy rates used by the Reserve Bank of India (RBI) in a decreasing order of their typical values:

1. Repo Rate (RR)
2. Reverse Repo Rate (RRR)
3. Marginal Standing Facility (MSF)

Which of the following is the correct sequence?
Answer: 3, 1, 2
Notes: The Marginal Standing Facility (MSF) rate is set higher than the Repo Rate (RR), while the Reverse Repo Rate (RRR) is set lower than the Repo Rate. Therefore, the typical order is: MSF > RR > RRR, i.e., 3, 1, 2 in decreasing order of value. This structure incentivizes borrowing and lending in accordance with RBI’s liquidity management.