The Reserve Bank of India (RBI) will conduct a 14-day variable rate reverse repo (VRRR) auction on February 24 for a notified amount of Rs 50,000 crore, the central bank said in a press release.
The auction will be held between 10:30 am and 11:00 am, the RBI said. The reversal of these funds will take place on March 10.
The VRRR is usually undertaken to withdraw excess liquidity from the system. Presently, the liquidity in the banking system is in surplus of around Rs 48,802.08 crore.
The RBI Governor Shaktikanta Das, in the monetary policy minutes released yesterday, said liquidity remains in a surplus mode in the banking system, even as the surplus is moderating. The overall monetary and liquidity conditions, therefore, remain accommodative, Das said.
“In such a scenario, it is necessary to persevere with the stance of withdrawal of accommodation to ensure a decisive process of disinflation,” Das added.
In the February monetary policy, the RBI had said that in the period ahead, while higher government expenditure and the anticipated return of forex inflows are likely to augment systemic liquidity, it would get modulated by the scheduled redemption of LTRO and TLTRO funds during February to April 2023.
The Reserve Bank will remain flexible and responsive towards meeting the productive requirements of the economy, the RBI said.
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