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    Question

    The MSF rate is pegged _____ basis points or a

    percentage point above the repo rate?
    A 45 Correct Answer Incorrect Answer
    B 50 Correct Answer Incorrect Answer
    C 75 Correct Answer Incorrect Answer
    D 90 Correct Answer Incorrect Answer
    E 100 Correct Answer Incorrect Answer

    Solution

    Banks borrow from the central bank by pledging government securities at a rate higher than the repo rate under liquidity adjustment facility or LAF in short. The MSF rate is pegged 100 basis points or a percentage point above the repo rate.

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