 "RBI plans to conduct 7-day VRR auction Fri to infuse ₹50,000 crore")
The Reserve Bank of India (RBI) plans to conduct a seven-day variable rate repo (VRR) auction on Friday aimed to infuse ₹50,000 crore in the banking system.
The last such auction for infusing liquidity was carried out on 30 October for ₹1 trillion.
The net liquidity in the banking system was in a surplus of ₹1.71 trillion on Wednesday, according to the latest data by the RBI. The surplus may fall in the coming days due to GST-related outflows.
The RBI’s VRR operations are intended to infuse liquidity into the financial system and anchor short-term money market rates closer to the policy repo rate.
The MSF rate, set 25 basis points (bps) above the policy repo rate, is the ceiling of the liquidity adjustment facility corridor. The SDF, which is 25 bps below the repo rate, is the floor. The policy repo rate is currently at 5.5 per cent.
The weighted average call money rate (WACR) was 5.41 per cent on Thursday, as compared to 5.38 per cent yesterday.
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