economics hard Fill in the Blank

The Standing Deposit Facility (SDF) rate serves as the floor of the RBI's liquidity adjustment corridor and is set ___ the Repo Rate.

  1. below
  2. Leverage
  3. Skewflation
  4. gig

Answer: below

Introduced to manage excess liquidity, the SDF allows banks to park surplus funds with the RBI without providing collateral. It is usually set 25 basis points below the Repo Rate, establishing the lower bound of the monetary policy operating corridor.

Topic Banking - Monetary Policy
Exam Relevance UPSC Prelims, Banking
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