Story thread · 7 reports / 2 sources

RBI turns to 30-day VRRR to absorb liquidity

economictimes.indiatimes.com · 10dShare

Kolkata: The Reserve Bank of India will hold a 30-day variable rate reverse repo (VRRR) auction Monday with a target to suck out Rs 7 lakh crore from the inter-bank market which is flush with excess liquidity following the special dollar-mobilisation programme.This central bank has been conducting VRRR auctions almost every day to manage the surplus liquidity, which could potentially put additional pressure on inflation. The excess liquidity also led the weighted call money rate to 4.95%, significantly below the policy rate. RBI typically endeavours to align overnight call rates as close as possible to the policy repo rate, which stands at 5.25%.Also Read: RBI mops up Rs 6.02 lakh crore through VRRR auctions against a Rs 8.50 lakh crore planThe long-term VRRR was announced as the RBI is trying to suck out excess liquidity from the system on a durable basis, analysts said. Some expect the excess liquidity spawned by the forex-inflow programme could rise to Rs 15 lakh crore by the end of

First report: Record FCNR (B): Banks mobilise $127 bn — economictimes.indiatimes.com, 12d