RBI aims to absorb ₹2.5 trillion via seven-day VRRR auction on Monday | Finance News
The Reserve Bank of India plans to conduct a seven-day variable rate reverse repo (VRRR) auction on Monday, aimed at absorbing Rs 2.5 trillion from the banking system.
On Friday, banks parked Rs 95,970 crore against the notified amount of Rs 1.5 trillion under the three-day VRRR auction.
A VRRR auction is a liquidity absorption tool used by the RBI to temporarily absorb surplus liquidity from the banking system.
Net liquidity in the banking system was in a surplus of Rs 3.5 trillion on Thursday, the latest data from the central bank showed.
The weighted average call rate (WACR) — which is the operating target of monetary policy — settled at 5.19 per cent, against the previous close of 5.16 per cent.
The SDF rate, which currently stands at 5 per cent, is the interest rate at which banks park their surplus funds with the RBI without providing collateral. It forms the lower bound of the RBI’s policy corridor, with the repo rate in the middle and the marginal standing facility (MSF) rate at the upper bound.
