Following a decline in surplus liquidity caused by advance tax payments, the Reserve Bank of India (RBI) has infused Rs 72,300 crore transient liquidity through two Variable Rate Repo (VRR) auction into the banking system.
The RBI injected Rs 50,016 crore through a two-day VRR auction at a cut-off rate of 5.26 per cent. It also infused another Rs 22,284 crore via a second two-day VRR auction at a cut-off rate of 5.26 per cent. Variable rate repo auctions are used by the RBI to manage liquidity mismatches in the banking system.
According to the RBI's data, as of June 16, surplus liquidity in the banking system stood at around Rs 23,881.21 crore, significantly lower than the surplus of around Rs 1.51 lakh crore recorded on June 15.
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