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      Question

      The RBI MPC voted unanimously to keep the repo rate

      unchanged at 5.25% in June 2026. Consequently, which of the following correctly states the Standing Deposit Facility (SDF) rate and the Marginal Standing Facility (MSF) rate?
      A SDF: 5.00%; MSF: 5.25% Correct Answer Incorrect Answer
      B SDF: 5.00%; MSF: 5.50% Correct Answer Incorrect Answer
      C SDF: 5.25%; MSF: 5.50% Correct Answer Incorrect Answer
      D SDF: 4.75%; MSF: 5.25% Correct Answer Incorrect Answer
      E SDF: 5.25%; MSF: 5.75% Correct Answer Incorrect Answer

      Solution

      The RBI MPC June 2026 resolution states that with the policy repo rate at 5.25%, the corridor is structured as follows: SDF rate = Repo rate minus 25 bps = 5.25% – 0.25% = 5.00%; MSF rate = Repo rate plus 25 bps = 5.25% + 0.25% = 5.50%. The Bank Rate also equals the MSF rate at 5.50%. This LAF corridor design with SDF at the floor and MSF at the ceiling determines the band within which overnight interbank rates are expected to move. The resolution explicitly confirmed: 'the SDF rate remains at 5.00% and the MSF rate and the Bank Rate remain at 5.50%'.

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