Surplus liquidity impact: Banks search to park ₹1.03-lakh crore with RBI

The Reserve Financial institution of India obtained gives from banks for parking liquidity amounting to ₹1,03,930 crore on the in a single day variable charge reverse repo (VRRR) public sale on Thursday towards the notified quantity of ₹75,000 crore.

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The banking system had surplus liquidity of ₹1,15,316 crore as on April 16, and RBI is attempting to suck out this through VRRR consistent with its “withdrawal of lodging” financial coverage stance.

The central financial institution accepted gives amounting to ₹75,027 crore at a weighted common charge of 6.49 per cent.

In his April 2024 financial coverage assertion, RBI Governor Shaktikanta Das stated: “Wanting forward, the Reserve Financial institution will stay nimble and versatile in its liquidity administration by essential and fine-tuning operations in each repo and reverse repo.

“We are going to deploy an acceptable mixture of devices to modulate each frictional and sturdy liquidity in order to make sure that cash market rates of interest evolve in an orderly method that preserves monetary stability.”

14-day VRR public sale

In the meantime, the RBI stated it would conduct a 14-day variable charge repo (VRR) public sale on Friday to infuse ₹75,000 crore liquidity into the banking system. This public sale announcement comes even because the central financial institution will public sale two dated securities – 7.37% GS 2028 and New GS 2064 – for a notified quantity of ₹24,000 crore.