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RBI's VRR auction sees tepid demand as liquidity eases

Mint New Delhi

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March 08, 2025

Banking liquidity deficit has fallen from a peak of over ₹2 tn in Jan to about ₹20,000 cr in Feb

- Anshika Kayastha

The Reserve Bank of India (RBI) saw tepid demand for its variable rate repo (VRR) auctions as liquidity tightness in the banking system has eased following the central bank's measures.

Against a notified amount of ₹50,000 crore, RBI received bids amounting to ₹8,375 crore at the 14-day VRR auction, indicating low requirement of funds by banks. That also reflected in the lower demand seen in the daily VRR auctions held this week.

Barring Monday (3 March), when RBI saw demand worth ₹16,557 crore against an auction amount of ₹25,000 crore, the demand in the daily VRR auctions fell substantially as liquidity in the system eased 4 March onwards.

Against a notified ₹25,000 crore, the central bank received bids worth ₹15,855 crore on Tuesday, ₹15,089 crore on Wednesday and ₹4,442 crore on Thursday. At the three-day auction today, it received bids worth ₹3,970 crore.

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