RBI to Conduct Rs 50,000 Crore 2-Day Variable Rate Repo Auction on June 3
Reserve Bank of India to Conduct Two-Day Variable Rate Repo Auction
The Reserve Bank of India (RBI) has announced that it will conduct a two-day variable rate repo (VRR) auction of Rs 50,000 crore on June 3. The auction will take place between 9:30 am and 10 am, with the reversal of these funds expected to occur on June 5.
According to the RBI's release, the decision to conduct a VRR auction was made following a review of current and evolving liquidity conditions. This move comes as liquidity in the banking system is estimated to be in surplus of around Rs 85,411.44 crore as of June 1, which has narrowed from a surplus of Rs 1.40 lakh crore on May 31.
A VRR auction was conducted by the RBI on Tuesday, which saw weak demand from banks despite lower surplus liquidity in the banking system. The central bank received Rs 17,445 crore bids at the three-day auction, against the notified amount of Rs 75,000 crore. The RBI accepted the entire bids and injected Rs 17,445 crore of transient liquidity into the banking system at a cut-off and weighted average rate of 5.26 per cent.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
| Auction Details | Tuesday's Auction | Notified Amount |
|---|---|---|
| Bid Amount | Rs 17,445 crore | Rs 75,000 crore |
| Cut-off Rate | 5.26% | - |
| Weighted Average Rate | 5.26% | - |
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