The Reserve Bank ofIndia (RBI) has introduced the SORRas

Solution

• What is SORR? o SORR is the Secured Overnight Rupee Rate, a benchmark interest rate introduced by the Reserve Bank of India (RBI). o It is based on secured money markettransactions, including repo and tri-party repo (TREP) transactions. • Purpose of SORR: o The SORR aims to improve transparency in the market. o It is designed to better reflect market dynamics for overnight rupee transactions in the Indian financial system. • Components of SORR: o The rate is calculated using secured transactions, which ensures that it reflects the market's true cost of borrowing, with collateral in place, making it less prone to market fluctuations.