Liquidity Adjustment Facility

Liquidity Adjustment Facility,

How To Define Liquidity Adjustment Facility?

The Liquidity Adjustment Facility (LAF) is a tool used primarily in monetary policy, primarily through lending to banks through the Reserve Bank of India (RBI) through repurchase agreements (repo). Allows RBI to lend through borrowing or repurchase agreements. This government is effective in handling liquidity pressures and ensuring the stability of the fundamentals of the financial market. In the United States, the Federal Reserve conducts repurchase and reverse purchase agreements as part of its open market operations.

  • The Liquidity Adjustment Facility (LAF) is a monetary policy instrument used by the Reserve Bank of India or RBI in India.
  • The RBI introduced the LAF in 1998 as part of the findings of the Nursing Committee on Banking Sector Reform.
  • LAF helps the RBI to manage liquidity and ensure economic stability so that banks can borrow money through repurchase or repurchase agreements, or lend to the RBI through reverse recharge agreements. Go
  • LAFs can control inflation in the economy by increasing and decreasing the money supply.

Literal Meanings of Liquidity Adjustment Facility


Meanings of Liquidity:
  1. Availability of cash for market or business.

Sentences of Liquidity
  1. Banks closed, creating serious liquidity problems for small businesses.


Meanings of Adjustment:
  1. With small changes or gestures you can get the desired fit, look, or result.

Sentences of Adjustment
  1. I have made some adjustments in my diet.

Synonyms of Adjustment

habituating, adapting, accustoming, harmonization, acclimatization, familiarization, accommodating, assimilation, accommodation, inurement, acculturation, habituation, assimilating, adaptation, naturalization, reconciliation


Meanings of Facility:
  1. A location, facility, or device provided for a specific purpose.

  2. The ability to do or learn something well and easily is a natural skill.

Sentences of Facility
  1. Kitchen utensils

  2. Speaks fluent language

Synonyms of Facility

flair, talent, knack, solution, genius, bent, provision, prerequisite, potential, space, equipment, aptitude, skill, gift, finesse, means