Bankers have bid 2.8 times more at the variable reverse repo (VRR) auction held on Friday, as the notified amount was only Rs 1 lakh crore, according to the Reserve Bank data on the auction result earlier in the day.
The central bank, in a statement, said it has accepted bids worth Rs 1,00,009 crore at a cut-off rate of 6.68% and the weighted average cut-off rate of 6.69%, and the auction saw bids worth Rs 2,77,402 crore or 2.77 times more than the offer.
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The banking system will need higher liquidity as the GST payout is nearing.
The statement also said the partial allotment percentage of bids received at the cut-off rate stood at 36.68.
The RBI began short-term VRR under the LAF (liquidity adjustment facility) for Rs 50,000 crore on Jan. 20, 2022. The auction will have a seven-day tenor, that's Jan. 12, 2024, the monetary authority said in a statement.
Since then, the Reserve Bank has been rebalancing the surplus liquidity in the system by shifting it out of the fixed rate overnight reverse repo window into the variable rate reverse repo (VRR) auctions of longer maturity.
The VRR auction was conducted on the CBS (e-Kuber) platform, and the minimum bid amount for the auction was Rs 1 crore and multiples thereof.
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