Which of the following statement(s) is/are NOT true regarding Marginal…
2021
Which of the following statement(s) is/are NOT true regarding Marginal Standing Facility (MSF)? I. The MSF rate plays no role in determining the corridor for the daily movement in the weighted average call money rate. II. MSF rate has no effect on policy repo rate.
- A.
Only I
- B.
Only II
- C.
Both I and II
- D.
Neither I nor II
Attempted by 5 students.
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Correct answer: C
The MSF rate forms part of the monetary-policy corridor around the policy repo rate and is linked to repo-rate movements. Hence both statements are not true.