RBI announces daily Variable Rate Repo (VRR) auctions starting January 16, 2025 (Today)

The Reserve Bank of India (RBI) has announced the commencement of daily Variable Rate Repo (VRR) auctions starting January 16, 2025, to address the evolving liquidity conditions in the financial system. These auctions will take place on all working days in Mumbai, with the reversal of funds occurring on the next working day.

Key Highlights of the Announcement:

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  1. Auction Timing:
    • The VRR auctions will be conducted daily between 10:00 AM and 10:30 AM.
  2. Reversal Dates:
    • The funds borrowed through VRR on Fridays will be reversed on the subsequent Monday, or the next working day if Monday is a holiday in Mumbai.
  3. First Auction Details:
    • The first auction will be held on Thursday, January 16, 2025, for an amount of ₹50,000 crore.
  4. Eligibility:
    • Standalone Primary Dealers (SPDs) and other eligible participants can participate in these auctions.
  5. Guidelines:
    • The operational framework for these auctions will adhere to the guidelines outlined in the RBI’s Press Release 2021-2022/1572 dated January 20, 2022.
  6. Liquidity Management:
    • The auction amounts will be determined by the RBI based on its ongoing assessment of liquidity conditions. The details of each auction will be announced separately on the RBI’s website.

This measure reflects the RBI’s proactive approach to managing liquidity dynamics, ensuring adequate availability of funds in the financial markets.