Monetary Policy Transmission
The LAF Corridor
Monetary policy transmission refers to how a change (or non-change) in the RBI's policy repo rate flows through to bank lending and deposit rates, and eventually to aggregate demand and inflation. The RBI operates this via the Liquidity Adjustment Facility (LAF), a corridor bounded by the Standing Deposit Facility (SDF) rate at the floor and the Marginal Standing Facility (MSF) rate at the ceiling, with the repo rate as the primary operative rate at the centre.
- SDF (floor): the rate at which RBI accepts uncollateralised overnight deposits from banks, absorbing surplus liquidity. Introduced in April 2022, replacing the fixed reverse repo rate as the floor of the LAF corridor.
- MSF (ceiling): rate at which banks borrow overnight from RBI against government securities in emergencies.
- As of August 2026: repo rate 5.25%, SDF 5.00%, MSF 5.50% — a standard 25-bps symmetric corridor around the repo rate.
● Tracked since February 06, 2026 · last seen August 05, 2026 · updates as the daily brief publishes
05 Aug '26
RBI's Monetary Policy Committee Holds Repo Rate, Revises Growth and Inflation Outlook
Economics
06 May '26
West Asia Energy Shock Tests India's Growth and Fiscal Resilience: S&P Analysis
Economics
22 Apr '26
Hormuz Crisis Shadows India's Economic Outlook: RBI MPC Flags Growth and Inflation Risks
Economics
08 Apr '26
RBI Holds Repo Rate at 5.25%: US-Iran Ceasefire Factored Into April 2026 Policy Decision
Economics
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