Reserve Bank of India juggles liquidity ops under revised framework

Conducts special variable rate repo operation to ease tight liquidity situation

The Reserve Bank of India (RBI) on Friday once again conducted a special variable rate repo operation to ease the tight liquidity in the system caused by the larger-than-expected goods and services tax (GST) collection. The central bank offered Rs 75,000 crore to banks, against which they submitted bid worth Rs 1.22 trillion. The cut-off was 4.09 per cent, above the repo rate of 4 per cent. Weighted average call money rates in the interbank market pushed up to a near two-year high of 4.44 per cent.

Observers say this is temporary and is in sync with the revised liquidity