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Standing Deposit Facility (SDF)
The standing deposit facility lets banks deposit surplus money with the RBI overnight and earn interest, without the RBI having to give them bonds in return. Its rate sits below the repo rate and acts as the floor of the RBI’s interest rate corridor.
Why It Matters
Short-term market interest rates move within the corridor between the SDF rate and the marginal standing facility rate.
In India
After the October 2026 hike, the SDF rate rose to 5.25%, with the repo at 5.50% and the marginal standing facility at 5.75%.
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