Comments
The Reserve Bank of India received offers from banks for parking liquidity amounting to ₹1,03,930 crore at the overnight variable rate reverse repo (VRRR) auction on Thursday against the notified amount of ₹75,000 crore.
The banking system had surplus liquidity of ₹1,15,316 crore as on April 16, and RBI is trying to suck out this via VRRR in keeping with its “withdrawal of accommodation” monetary policy stance.
The central bank accepted offers amounting to ₹75,027 crore at a weighted average rate of 6.49 per cent.
In his April 2024 monetary policy statement, RBI Governor Shaktikanta Das said: “Looking ahead, the Reserve Bank will remain nimble and flexible in its liquidity management through main and fine-tuning operations in both repo and reverse repo.
“We will deploy an appropriate mix of instruments to modulate both frictional and durable liquidity so as to ensure that money market interest rates evolve in an orderly manner that preserves financial stability.”
14-day VRR auction
Meanwhile, the RBI said it will conduct a 14-day variable rate repo (VRR) auction on Friday to infuse ₹75,000 crore liquidity into the banking system. This auction announcement comes even as the central bank will auction two dated securities – 7.37% GS 2028 and New GS 2064 – for a notified amount of ₹24,000 crore.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.