The Reserve Bank of India on July 13 said it will conduct 14-day variable rate reserve repo (VRRR) auction for the notified amount of Rs 1 lakh crore on July 14.
The auction will take place between 10:30 AM and 11:00 AM and reversal of the funds will initiate on July 28.
RBI in its release said, “On a review of the current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Reverse Repo auction on July 14.”
Usually, a VRRR is conducted by central bank on annual basis to remove surplus liquidity from the banking system.
As per RBI’s money market operations, currently, the liquidity in the banking system is estimated to be in surplus of around Rs 1.81 lakh crore.
Since the start of this month, the central bank has conducted six VRRR auctions to remove surplus liquidity from the system.
