<p>Mumbai: India's central bank will conduct a variable rate repo (VRR) auction for a third time in less than two weeks later on Wednesday as liquidity conditions stay tight and overnight rates remain elevated.</p>.<p>The Reserve Bank of India (RBI) will conduct a two-day repo for 500 billion rupees ($6 billion) later in the day based on "a review of current and evolving liquidity conditions", the central bank said.</p>.<p>The RBI had infused 1.75 trillion rupees through a seven-day VRRR on December 22 and 1 trillion rupees in the prior week that matured on December 22.</p>.<p>Last week, <em>Reuters</em> reported market participants expected the central bank to provide short-term cash infusion as the banking system liquidity deficit ballooned to near eight-year highs.</p>.High credit demand, low NPAs; public sector banks' total profit likely to touch Rs 1.50 lakh crore.<p>The deficit was 2.68 trillion rupees as of December 26, its highest level since April 2016.</p>.<p>Despite the liquidity infusion, overnight rates continue to remain above the marginal standing facility (MSF) rate of 6.75 per cent, which is the upper end of the monetary policy corridor.</p>.<p>The weighted average interbank call money rate was at 6.89 per cent on Wednesday, while the weighted average TREPS rate was at 6.79 per cent. ($1 = 83.3200 Indian rupees)</p>
<p>Mumbai: India's central bank will conduct a variable rate repo (VRR) auction for a third time in less than two weeks later on Wednesday as liquidity conditions stay tight and overnight rates remain elevated.</p>.<p>The Reserve Bank of India (RBI) will conduct a two-day repo for 500 billion rupees ($6 billion) later in the day based on "a review of current and evolving liquidity conditions", the central bank said.</p>.<p>The RBI had infused 1.75 trillion rupees through a seven-day VRRR on December 22 and 1 trillion rupees in the prior week that matured on December 22.</p>.<p>Last week, <em>Reuters</em> reported market participants expected the central bank to provide short-term cash infusion as the banking system liquidity deficit ballooned to near eight-year highs.</p>.High credit demand, low NPAs; public sector banks' total profit likely to touch Rs 1.50 lakh crore.<p>The deficit was 2.68 trillion rupees as of December 26, its highest level since April 2016.</p>.<p>Despite the liquidity infusion, overnight rates continue to remain above the marginal standing facility (MSF) rate of 6.75 per cent, which is the upper end of the monetary policy corridor.</p>.<p>The weighted average interbank call money rate was at 6.89 per cent on Wednesday, while the weighted average TREPS rate was at 6.79 per cent. ($1 = 83.3200 Indian rupees)</p>