3-day VRRR auction receives relatively better response from banks

the Reserve Bank of India I got relatively better response for 3-day variable rate reverse buyback auction It was conducted on Tuesday, with the banks posting the money collected ₹32,375 crore against the notified amount of ₹75,000 crore.

The money posted by the banks amounted to about 43 percent of the amount reported with a weighted average of 6.49 percent.

In the 14-day VRRR auction held on 2 June, banks placed only about 25 per cent (or INR 50,868 crore) of the reported amount of ₹2 crore.

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Prefer to stop more money in the 3-day VRRR Auction face to face An Iranian marzipan, CIO-Fixed Income, LIC mutual fund, said the 14-day VRRR auction clearly shows that banks are wary of holding funds for a longer period because upcoming pre-tax inflows may create some liquidity mismatch.

The Central Bank decided to conduct a 3-day VRRR after reviewing the current and changing liquidity conditions.

The liquidity absorption measure by the RBI is in line with its monetary policy stance of remaining focused on the withdrawal of facilities.