RBI Drains ₹2L-cr Liquidity

The seven-day variable rate reversal repo (VRRR) auction on Friday received a good response with a subscription of ₹2.08 lakh crore.

- Christina Titus

This was in contrast to the tepid response to the recent VRRR auctions.

The Reserve Bank of India (RBI) accepted a sum of ₹2 lakh crore from banks at a cut-off rate of 5.49%.

While some outflows are expected in the next week on account of upcoming GST payments, the liquidity levels in the system remain reasonably high. As the treasury head of a leading bank pointed out, "There is ample liquidity in the system. It is more than ₹3 lakh crore despite the many VRRR auctions."

On Thursday, the liquidity surplus in the banking system was ₹3.09 lakh crore compared to ₹3.11 lakh crore on July 16 and ₹4.25 lakh crore on July 4.