The Reserve Bank of India (RBI) on May 22 said it will conduct a two-day variable rate repo auction for a notified amount of Rs 75,000 crore.
“On a review of current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Repo (VRR) auction on May 22,” the central bank said in a release.
The bidding started from 11.30 am and 12 pm and the reversal of these funds will be done on May 24.
Usually, the central bank conducts variable rate repo auction when the liquidity in the banking system turns tight or is in deficit.
Currently, the liquidity in the banking system is estimated to be in deficit of around Rs 2.56 lakh crore.
On May 21, the central bank also conducted three-day variable rate repo auction for notified amount of Rs 1.25 lakh crore. The RBI accepted 1.25 lakh crore bids.
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