The Reserve Bank of India (RBI) on Wednesday absorbed Rs 2.90 lakh crore 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 Rs 3,17,088 crore for a notified amount of Rs 2.50 lakh crore. However, it accepted only Rs 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 Rs 40,302 crore for a notified amount of Rs 1 lakh crore, which it accepted fully.
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.
Currently, liquidity in the banking system is estimated to be in surplus of around Rs 9.85 lakh crore as on September 15.
Apart from VRRR, last week, the central bank announced Open Market Operation (OMO) sales of government securities for a ..
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