RBI Conducts Overnight VRR Auction Of Rs 75,000 Crore, Gets Bids Worth Rs 1.37 Trillion

Mumbai: The Reserve Bank of India on Monday conducted an overnight variable rate repo auction under liquidity adjustment facility (LAF) for an amount of Rs 75,000 crore. According to a report by Mint, this was done to augment the liquidity shortfall in the economy.Also Read – RBI Jobs 2022: RBI Opens Applications For Various Posts. Know How To Check Eligibility Criteria, Other Details Here

In a release, the RBI said that the date of reversal is on January 25, 2022. RBI received bids of Rs 1.37 trillion against the notified amount of Rs 75,000 crore, the report added. The weighted average rate was 4.13 per cent. Also Read – After Winter Session, Crypto Bill Unlikely To Be Introduced In Budget Session Too

Earlier too, on January 20, the RBI had conducted an overnight variable rate repo (VRR) auction of Rs 50,000 crore. It is expected that Rs 2.49 trillion will come into the economy after the 7 and 28-day maturity period. Also Read – SBI Withdraws Special Support Scheme For Infected Employees Even As Daily Cases Continue To Rise

Adding to this, the report said that Rs 4.35 trillion will come into the economy after the 14-day maturity period. The liquidity was surplus in the economy by Rs 7.7 trillion, in 2019.

The central bank had said it will continue to rebalance liquidity conditions in a non-disruptive manner while maintaining adequate liquidity to meet the needs of the productive sectors of the economy.

For the unversed, RBI borrows money from the banks at the Reverse Repo rate. It borrows money in two parts, one at a fixed rate of interest and the other at a variable rate of interest. The RBI Governor Shaktikanta Das had earlier said that for the time being, RBI would focus more on the variable rate of interest for a maturity of 14 days.