RBI’s Monetary Policy Review: RBI Hikes Repo Rate to 6.25%

On June 6, 2018, the six members Monetary Policy Committee (MPC) of RBI has decided to hike Repo (short term lending rate) to 6.25% from 6.00%. As per the second Bi-monthly Monetary Policy Statement, the current policy rates of RBI ..

Month: Current Affairs - June, 2018

What is a Contractionary Policy?

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 ..

What is the meaning of Cash Reserve Ratio?

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 ..

Marginal Standing Facility

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 ..

What is Liquidity?

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 ..

Liquidity Adjustment Facility (LAF)

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. ..