Mumbai, September 15 (Daily Kiran) : The Reserve Bank of India (RBI) received bids totaling ₹3.93 lakh crore in its latest Variable Rate Reverse Repo (VRRR) auction, held on September 15. This comes as the central bank aims to absorb excess liquidity in the banking system, which has seen a surplus of around ₹10.73 lakh crore as of September 11.
According to an official statement from the RBI, the amount bid was against a notified limit of ₹5 lakh crore. All bids were accepted at a cut-off and weighted average rate of 5.24%. The RBI has been conducting these auctions to maintain overnight money market rates in line with the repo rate.
The surge in liquidity follows a significant accumulation of Foreign Currency Non-Resident (FCNR-B) deposits by banks. Additionally, the RBI announced last week a plan to conduct open market operations (OMO) to further absorb liquidity, involving the sale of government securities valued at ₹1 lakh crore in three phases.
The first OMO auction, set for September 17, will offer ₹50,000 crore, followed by two more auctions of ₹25,000 crore each on September 21 and 28. These measures are part of the RBI’s strategy to manage the banking system’s excess funds while keeping short-term money market rates aligned with its policy rates.
Earlier this month, the RBI had raised over ₹3.53 lakh crore through a one-day VRRR auction, with a notified amount of ₹5 lakh crore and received bids amounting to ₹3,53,390 crore, absorbing more than 70% of the notified amount at the same cut-off rate of 5.24%.
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