Overnight money market rates near policy repo rate post RBI's VRRR auctions

Overnight money market rates climb following the RBI's VRRR auction and GST outflows, with WACR approaching the policy repo rate

Overnight money market rates climbed on Monday following the Reserve Bank of India's (RBI) seven-day Variable Rate Reverse Repo (VRRR) auction conducted on Friday. Additionally, banks turned to the Tri-Party Repo (TREPS) market to manage their short-term liquidity needs due to GST outflows, estimated at around ₹1.2 trillion, which further pushed up overnight TREPS rates, said dealers.

 

The weighted average call rate (WACR), which is the operating target of the monetary policy, inched closer to the policy repo rate of 5.5 per cent as it settled at 5.48 per cent, compared to the previous close of 5.35 per cent. The