The Reserve Bank of India (RBI) manages liquidity through the Liquidity Adjustment Facility (LAF), which includes the repo rate and the reverse repo rate. The difference between these rates (often referred to as the LAF corridor spread) is a policy tool.
In the last one year i.e., June 2010 to June 2011, the difference between repo rate and reverse repo - rate is of the order of
Asked in UPPSC Upper Mains 2010 · Topic: Money & Banking (Monetary Policy: Objectives, Instruments (quantitative and qualitative), and Transmission Mechanism)
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