Banks bid ₹45,783 crore at RBI overnight VRR auction as liquidity dips

Banks bid nearly double the notified Rs 25,000 crore at RBI's overnight VRR auction as surplus liquidity fell to Rs 63,745 crore from Rs 1.89 trillion earlier this week

Banks on Thursday bid Rs 45,783 crore against the notified amount of Rs 25,000 crore at the overnight variable rate repo (VRR) auction, as the net surplus liquidity in the banking system fell to Rs 63,745 crore from Rs 1.89 trillion at the start of the week.

 

Banks parked funds at a cut-off rate of 5.51 per cent.

 

On Tuesday, the Reserve Bank of India (RBI) had conducted a VRR auction after a gap of about a month. However, banks were reluctant to participate in the three-day VRR auction on Tuesday. The central bank received bids worth only Rs 585 crore against the notified amount of Rs 75,000 crore.

 

 

Over the past month, the central bank has been using Variable Rate Reverse Repo (VRRR) auctions to align overnight money market rates with the repo rate. 

RBI will conduct a 6 -day VRR auction for a notified amount of Rs 1 trillion tomorrow  (Friday).