 "RBI to conduct 7-day VRR to inject up to Rs 1.25 trn into banking system")
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The Reserve Bank of India (RBI) will conduct a 7-day variable rate repo auction (VRR) auction on Friday to inject up to Rs 1.25 trillion into the banking system, the central bank said on Thursday.
In the preceding three VRR auctions, the central bank received a significant response, with banks submitting bids ranging between 2.5 to 3.2 times the bidding amounts due to tight liquidity conditions in the system.
Banks submitted bids worth Rs 1.6 trillion, around 3.2 times against the notified amount of Rs 50,000 crore, at the two-day VRR auction conducted by the RBI on Wednesday.
The deficit liquidity in the banking system widened to Rs 2.6 trillion on Wednesday. Liquidity has remained largely in deficit mode in the current quarter.
The central bank had conducted a VRR auction after six months on December 15.
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