Reverse Repo Rate

What is a Contractionary Policy?

January 8, 2018

Contractionary Policy refers to the monetary policy which aims to slow down the economy by introducing a reduction in money supply for lesser money and investment. There are many economic tools used by the Central Bank of every nation like CRR, SLR, Repo, Reverse Repo, Interest Rate etc. to...

What is the meaning of Cash Reserve Ratio?

December 21, 2017

Cash Reserve Ratio is a specific amount of funds which the commercial banks have to keep with the Reserve Bank of India to ensure liquidity in the system. The funds are a part of the Net Demand and Time Liabilities (NDTL). A reduction in CRR leads to more liquidity...

Marginal Standing Facility

March 1, 2015

Marginal Standing Facility is a new Liquidity Adjustment Facility (LAF) window created by Reserve Bank of India in its credit policy of May 2011.  MSF is the rate at which the banks are able to borrow overnight funds from RBI against the approved government securities. The question is –...

What is Liquidity?

February 28, 2015

By Liquidity, we simply mean to refer to the money floating in the system that is available to all stakeholders of the markets viz.  Individuals, corporate entities and the government. We know that liquidity is influenced by the demand and supply of money in the system.  RBI can either...

Liquidity Adjustment Facility (LAF)

April 28, 2011

Liquidity Adjustment Facility (LAF) is the primary instrument of Reserve Bank of India for modulating liquidity and transmitting interest rate signals to the market. It refers to the difference between the two key rates viz. repo rate and reverse repo rate. Informally, Liquidity Adjustment Facility is also known as Liquidity...

Advertisement