India’s central bank said on Wednesday it will conduct variable rate repo (VRR) auctions on all working days until further notice amid tight liquidity in the banking system.
Liquidity in the country’s banking system stood at a deficit of 2.09 trillion rupees as of Jan. 14, data from the Reserve Bank of India showed. VRR auctions enable the Reserve Bank of India (RBI) to inject liquidity into the system.
The auction amounts will be decided by the regulator, based on assessment of the liquidity conditions, and will be announced via a press release on the RBI website.
First of these auctions will be conducted on Jan. 16 for an amount of 500 billion rupees, the regulator said in a press release.
The RBI has conducted six VRR auctions so far this month to help cash-strapped lenders.
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