Amount parked in RBI's SDF window declines on back of VRRR auctions

The amount parked by banks in the Reserve Bank of India's SDF window has fallen significantly, driven by VRRR auctions, with the call rate aligning closer to the repo rate

The amount parked by banks in the Reserve Bank of India’s (RBI’s) standing deposit facility (SDF) window declined to ₹1.2 trillion from ₹3.26 trillion at the start of the month, following variable rate reverse repo (VRRR) auctions, market participants said.

 

The SDF amount on Thursday was the lowest since April 22 of the current year, latest RBI data showed.

 

“Banks are parking their funds in VRRR; that is why there is a decrease in the SDF amount,” said a money market dealer at a state-owned bank. “The overnight rates have also moved up, with the tri-party repo rate now trading