RBI Raises ₹2 Trillion in VRRR Auction Amid High Demand
RBI mops up ₹2 trillion through VRRR auction amid surplus liquidity
Business Standard
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The Reserve Bank of India (RBI) conducted a variable rate reverse repo (VRRR) auction on Friday, attracting bids totaling ₹2.28 trillion against a notified ₹2 trillion. This move addresses the ongoing liquidity surplus in the banking system, which was ₹4.09 trillion on Thursday.
- 01RBI's VRRR auction attracted ₹2.28 trillion in bids.
- 02The notified amount for the auction was ₹2 trillion.
- 03Liquidity surplus in the banking system was ₹4.09 trillion on Thursday.
- 04The weighted average call rate (WACR) increased to 5.11% today.
- 05This auction reflects the RBI's management of liquidity conditions.
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On Friday, the Reserve Bank of India (RBI) successfully conducted a variable rate reverse repo (VRRR) auction, garnering ₹2.28 trillion in bids against a notified amount of ₹2 trillion. This strong demand from banks highlights the ongoing liquidity surplus in the banking system, which stood at ₹4.09 trillion on Thursday, a decrease from ₹5.2 trillion on Wednesday. The auction was initiated by the RBI to manage transient liquidity conditions effectively. Additionally, the weighted average call rate (WACR) saw a slight increase, reaching 5.11%, compared to 5.09% at the previous close. This auction is part of the RBI's broader strategy to ensure stability in the financial system amidst fluctuating liquidity levels.
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The RBI's actions in managing liquidity can influence interest rates and borrowing costs for consumers and businesses.
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