RBI should be free to unilaterally decide on reverse repo, MSF: Report

The currency and finance report, which the central bank claims is not its official view, says the RBI must retain the freedom to tweak the reverse repo and MSF rate for liquidity management purposes

The currency and finance report of the Reserve Bank of India (RBI) made a strong pitch for letting the central bank tweak the policy corridor while leaving the decision to change repo rate through a consultative approach by the six-member monetary policy committee (MPC), in which the governor is the chair and has a casting vote right to arrive at a decision in case of a draw. 

The policy corridor is the gap between repo rate, at which the central bank lends to banks, and the reverse repo rate, at which liquidity is drained out. An emergency liquidity borrowing facility