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