From this survey of advanced economies, five key features of monetary operations stand out. First, there is a minimum reserve requirement. Second, there is a single policy rate. Third, the objective of the policy rate is to target a short-term money market rate.
Fourth, there is a corridor around the policy rate charted by interest rates for standing facilities which aim to contain the volatility in the target interest rate. Fifth, the interest rates on standing facilities are determined with reference to the policy rate. What is the Reserve Bank of India’s operating framework?