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Monetary Policy Update (MP1-FY18): Standing deposit facility (SDF), Tri-party Repo Rate & More

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- As such we covered the theory monetary policy and review of bi-monthly monetary policies during 2016-17.
- But, afterwards RBI released the first bimonthly policy of the financial year 2017 – 18 in April 2017. it contains so many new changes, so I have add it as a rejoinder to the topics I've already taught.
- Earlier we had learned that to absorb the excess liquidity created by the demonetization, forced RBI to impose incremental CRR, and issue Cash management bills under the market stabilisation scheme (MSS). But now those CMB are maturing, so to temporarily absorb that excess liquidity under reverse repo mechanism, RBI narrowed the policy corridor.
- What is standing deposit facility (SDF)
- Swapping of the collateral in repo window.
- Frequency of NEFT settlements increased from one hour to half hour.

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