The Reserve Bank of India on said it will conduct a special 7 day VRR auction on Dec 15, 2023 instead of usual 14 day VRRR auction.
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Mumbai: The Reserve Bank of India (RBI) will conduct a 7-day variable rate repo (VRR) auction for 1 trillion rupees ($12 billion) on Dec. 15 in place of the usual 14-day variable rate reverse repo (VRRR) auction, it said in a release on Thursday.
"The 14-day VRRR auction conducted on December 1, 2023 and subscribed for 224.68 billion rupees is maturing and allowed to be reversed on December 15, 2023," the RBI said.
"Furthermore, in view of likely outflows from the banking system on account of advance tax and GST (goods and services tax) payments, it has been decided to conduct a 7-day Variable Rate Repo auction on December 15, 2023, Friday, in lieu of the main operation," it added.
This marks the first such VRR auction since June 19 when the RBI chose to infuse short-term funds to stop overnight cash rates from rising above the Marginal Standing Facility (MSF) rate.
Banking system liquidity has stayed in a deficit mode since Dec. 6 and stood at 387 billion rupees on Wednesday.
The weighted average interbank call money rate was at 6.76 per cent on Thursday while the weighted average tri-party repo or TREPS rate was at 6.75 per cent, in line with the MSF rate of 6.75 per cent.