 "Reserve Bank of India conducts variable repo rate auction of Rs 75,000 cr")
The Reserve Bank of India (RBI) on Monday offered the banking system Rs 75,000 crore of overnight liquidity through variable rate repo (VRR) auction, while simultaneously announcing dated liquidity mopping operations through variable rate reverse repo auction (VRRR).
The central bank offered Rs 75,000 crore of liquidity to the banking system against which banks bid for up to Rs 1.38 trillion. At the same time, the RBI said it would conduct a 28-day VRRR of Rs 50,000 crore and a Rs 2 trillion VRRR for three days.
The opposite nature of liquidity operations is in line with the revised liquidity framework of the RBI, which suggests that the liquidity adjustment facility (LAF) will move more towards longer-dated instruments, and short-term liquidity operations can be done to smoothen out any liquidity mismatch.
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