Paper I · 6 Indian Economy & Planning · 6.2.1 Money and monetary policy

6.2.1.5 Liquidity management: LAF corridor, repo, SDF, MSF, MSS and sterilisation

RBI keeps the short-term interest rate near the repo rate by lending or absorbing funds each day through a corridor of facilities; the MSS and sterilisation deal with liquidity from capital inflows.

  • APPSC Paper I · Paper I
  • Advanced level
  • 6 min read
  • Full course

Key terms

  • LAF
  • repo
  • reverse repo
  • SDF
  • MSF
  • corridor
  • MSS
  • sterilisation
  • VRR
  • VRRR
  • WACR

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. Mains writingMains writing
  5. Common trapsFoundation
  6. Quick revisionFoundation

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