RBI to conduct Rs 75K cr 3-day VRR auction

Mumbai: The Reserve Bank of India (RBI) on Wednesday said it will conduct a three-day variable rate repo (VRR) auction of Rs 75,000 crore on March 20.

The auction will take place between 9:30 AM and 10:00 AM on March 20, and the reversal of these funds will take place on March 23, as per the central bank’s release.

The central bank announced the auction based on the current and evolving liquidity conditions of the banking system, the release added.

Currently, the liquidity in the banking system is estimated to be in surplus of around Rs 81,963.69 crore. On March 17, the RBI injected Rs 48,014 crore of transient liquidity into the banking system via a seven-day VRR auction.

Before this, the central bank had infused Rs 3.50 lakh crore durable liquidity into the banking system through open market purchase (OMO) of government securities.

In the last few months, the RBI has been infusing heavy liquidity into the banking system in order to keep overnight rates under check.