RBI absorbs ₹2.9 trillion via two VRRR auctions amid surplus liquidity

The RBI, since last month, has been conducting various VRRR auctions in order to absorb surplus liquidity from the banking system and align the overnight money market rates to the repo rate

The Reserve Bank of India (RBI) on Wednesday absorbed ₹2.90 trillion through two variable rate reverse repo (VRRR) auctions from the banking system amid a huge surplus.

In the first auction, the central bank received bids worth ₹3,17,088 crore for a notified amount of ₹2.50 trillion. However, it accepted only ₹2,50,025 crore at a cut-off and weighted average rate of 5.24 per cent.

The central bank received a tepid response in the second auction with bids worth ₹40,302 crore for a notified amount of ₹1 trillion, which it accepted fully.

Currently, liquidity in the banking system is estimated to be in surplus of around ₹9.85 trillion as on September 15.