Banks Bid Rs 1.6 Trillion in Variable Rate Repo Auction Amid Tightening Liquidity
The Reserve Bank of India (RBI) conducted two variable rate reverse repo (VRRR) auctions totaling ₹44,430 crore, aiming to absorb surplus liquidity from the banking system. Despite the central bank’s readiness to absorb up to ₹1-lakh crore, banks utilized only a portion of the available amount.
In the first auction, banks deployed ₹32,576 crore out of the notified amount of ₹50,000 crore, at a weighted average rate of 6.49 percent. This move came as the liquidity surplus approached ₹1 trillion, prompting the RBI to take action to manage overnight money market rates.
The liquidity surplus in the banking system reached ₹98,920 crore, leading to a decline in overnight money market rates. With the call rate dropping below the repo rate, the RBI intervened to maintain stability by conducting the VRRR auction.
Market participants anticipate continued surplus liquidity in the current month, though some fluctuations may occur due to external factors such as elections. Despite potential challenges, liquidity has remained largely in surplus throughout April, signaling ongoing market stability.
The Daily Current Affairs Quiz which keeps you updated with the current events happening all…
Traffic congestion is a serious problem in many Asian cities, affecting millions of people every…
Uttar Pradesh is a state rich in culture, history, and religious significance. Among its many…
Many countries around the world have unique nicknames that reflect their culture, history, or geography.…
The World Day of Remembrance for Road Traffic Victims (WDR) is observed on the third…
On the occasion of the inauguration of Symbiosis International University’s first international campus at Dubai…