On December 2, RBI will hold a 14-day variable rate reverse repo auction.
The VRRR is typically implemented to remove systemic access liquidity. Currently, there is an excess of liquidity in the banking sector of over Rs. 1.2 lakh crore.
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On December 2, the Reserve Bank of India (RBI) will hold an auction for a 14-day variable rate reverse repo (VRRR) for a specified sum of Rs 1.50 lakh crore.
The central bank stated in a release on December 1 that the auction would take place between 10.30 and 11 am. On December 16, these money transfers will be reversed.
The VRRR is typically implemented to remove systemic access liquidity. Currently, there is an excess of liquidity in the banking sector of over Rs. 1.2 lakh crore.
The central bank undertook a 14-day VRRR on November 18 via which it removed Rs 52,065 crore from the banking sector. On December 2, the sum will be reversed.
On September 30, Governor Shaktikanta Das declared that the RBI will continue holding 14-day VRRR auctions but would no longer hold 28-day VRRR auctions due to the existing state of the banking system's liquidity.
"The 28-day VRRR and the 14-day VRRR will now be combined due to the moderation in excess liquidity. As a result, only the 14-day VRRR auction will be held going forward "Das shared the statement on monetary policy.
He continued, "We will continue to fine-tune activities of various maturities for absorption as well as injection of liquidity as may be necessary from time to time."
