Banks park Rs 4.3 trn in Rs 5-trn variable rate reverse repo auction

From this year, the central bank has moved to variable rate reverse repo auctions, instead of fixed rate auctions

Banks on Friday parked Rs 4.31 trillion of their surplus funds with the Reserve Bank of India (RBI) at a cut-off of 3.99 per cent, almost touching the repo rate, indicating the money market rates are not going to fall in a hurry even as the RBI goes easy on its liquidity absorption mode.  

The central bank had surprised the bond market by announcing a Rs 5 trillion variable rate reverse repo (VRRR) auction, instead of an expected Rs 8 trillion auction, as the economy suffered dislocations due to the ongoing Omicron surge.  

From this year, the central bank has moved to