The Reserve Bank of India (RBI) absorbed INR 71,971 crore from the banking system through an overnight Variable Rate Reverse Repo (VRRR) auction and conducted two open market operations (OMO), aiming to manage surplus liquidity estimated at approximately INR 4.92 lakh crores.
On Tuesday, the Reserve Bank of India (RBI) absorbed a significant amount of INR 71,971 crore from the banking system through an overnight Variable Rate Reverse Repo (VRRR) auction. This operation was aimed at aligning overnight money market rates with the benchmark policy repo rate and managing surplus liquidity estimated to be around INR 4.92 lakh crores currently in the system.
According to an official release, the central bank fully accepted all bids received against a total notified auction size of INR 75,000 crores at a cut-off and weighted average rate of 5.24 per cent. This move is one among several undertaken by the RBI to manage the surplus liquidity.
Furthermore, as per the RBI data, two open market operations (OMO) were conducted on separate dates to further manage the surplus liquidity. The first OMO took place on 17th September, resulting in sales of Government securities worth INR 50,000 crores, followed by another on 21st September with sales of INR 25,000 crores. A final tranche of INR 25,000 crores is scheduled for the 28th of this month.
The banking system's liquidity surplus can be attributed primarily to the heavy mobilization of Foreign Currency Non-Resident deposits, subsequent currency swaps with the central bank, and month-end government expenditure on salaries and pensions.
Source:
Akashvani News
