RBI to conduct Rs 25,000 cr overnight VRR auction on Jan 30

The Reserve Bank of India (RBI) on January 29 said it will conduct overnight variable rate repo auction of Rs 25,000 crore on January 30.

Source: ani

The auction will be held between 10:30am and 11am and the reversal of funds will take place on January 31, release said.

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Usually, the central bank announces the variable rate repo (VRR) auction to inject liquidity in the banking system when it turns tight or deficit.

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Liquidity in the banking system is estimated to be in deficit of around Rs 2.59 lakh crore.

Source: ANI

The liquidity in the banking system remained deficit in the last few months and the central bank tried it manage by conducting various variable rate repo auction.

Source: ANI

In January, the central bank conducted five VRR auctions worth Rs 7.50 lakh crore, including current announcement.

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For these auctions, banks have shown heavy response and submitted more than twice bids but the central bank accepted only the amount close to the notified auction amount.

Source: ANI

The central bank on January 29 conducted a two-day VRR auction, in which banks submitted bids worth Rs 73,290 crore and the RBI only accepted bids worth Rs 25,001 crore at a 6.74 per cent cut-off rate

Source: RBI

The liquidity deficit in the banking system rose to a 14-year-high of Rs 3.5 lakh crore on January 24 following the outflows from the banking system to make goods and services tax payments.

Source: Facebook Photo