**Summary:**
This Reserve Bank of India (RBI) circular, reference number RBI2017201833 dated August 2, 2017, informs all Primary Dealers (PDs) of a revision to the Standing Liquidity Facility. Following the Third Bimonthly Monetary Policy Statement, 2017-18, the Monetary Policy Committee (MPC) reduced the repo rate under the Liquidity Adjustment Facility (LAF) by 25 basis points, from 6.25% to 6.0%, effective immediately. Consequently, the collateralized liquidity support available to PDs from the Reserve Bank under the Standing Liquidity Facility will be provided at the revised repo rate of 6.0%, effective August 2, 2017. For inquiries, contact Janak Raj, Principal Adviser, Monetary Policy Department, Central Office Building, Shahid Bhagat Singh Marg, P.B.No.406, Mumbai-400 001. Telephone: 91-22-2270 4227; Fax: 91-22-2270 0849 / 2261 0430; Email: helpmpdrbi.org.in.
Key Entities Referenced
Reserve Bank: The central bank of India, also referred to as the 'RBI' in the text. It provides liquidity support to Primary Dealers.
Primary Dealers: Financial institutions that underwrite and distribute government securities. They are provided with a Standing Liquidity Facility by the Reserve Bank.
Standing Liquidity Facility: A facility provided by the Reserve Bank to Primary Dealers for collateralized liquidity support.
Third Bimonthly Monetary Policy Statement, 2017-18: A monetary policy statement issued by the Monetary Policy Committee.
Monetary Policy Committee: The committee responsible for setting monetary policy in India.
Liquidity Adjustment Facility: A tool used by the Reserve Bank to manage liquidity in the market.
repo rate: The rate at which the Reserve Bank lends money to commercial banks against the security of government securities.
Mumbai, Maharashtra: Location of the Central Office Building of the Monetary Policy Department.
RBI/2017-2018/33 Shravana 11,1939 (Saka)
REF.No.MPD.BC.382/07.01.279/2017-18 August 2, 2017
To
All Primary Dealers
Dear Sir/Madam,
Standing Liquidity Facility for
Primary Dealers
Please refer to the Third Bi-monthly Monetary Policy Statement, 2017-
18 - Resolution of the Monetary Policy Committee (MPC), in terms of which
the repo rate under the Liquidity Adjustment Facility (LAF) has been reduced
by 25 basis points from 6.25 per cent to 6.0 per cent with immediate effect.
2. Accordingly, the Standing Liquidity Facility provided to Primary Dealers
(PDs) (collateralised liquidity support) from the Reserve Bank would be
available at the revised repo rate, i.e., at 6.0 per cent with effect from August
2, 2017.
Yours faithfully,
(Janak Raj)
Principal Adviser
_________________________________________________________________________________________
Monetary Policy Department, Central Office Building, Shahid Bhagat Singh Marg, P.B.No.406, Mumbai-400 001
Tel.: (91-22) 2270 4227 Fax : (91-22) 2270 0849 / 2261 0430 E-mail : helpmpd@rbi.org.in