Finance1 min read

RBI's Rs 50,000 crore VRRR faces a muted response from the market

By · Published by Everything Blog

In short

The Reserve Bank of India encountered a subdued reception during its Rs 50,000 crore Variable Rate Reverse Repo auction. Even with this muted response, the monetary authority plans to hold another VRRR operation of ₹50,000 crore on Wednesday. Alongside these operations, the weighted average call rate registered a minor decline from Monday to Tuesday. Specifically, the borrowing rate eased to 5.45% from the previous session's 5.50%.

Key points

  • Commercial lenders showed limited interest in deploying cash through the central bank's R…: Commercial lenders showed limited interest in deploying cash through the central bank's Rs 50,000 crore reverse repo offering.
  • The monetary authority intends to maintain its liquidity absorption schedule with another…: The monetary authority intends to maintain its liquidity absorption schedule with another ₹50,000 crore operation on Wednesday.
  • Interbank funding rates dipped slightly as the weighted average call rate contracted by f…: Interbank funding rates dipped slightly as the weighted average call rate contracted by five basis points.

Sources checked by our analysis pipeline: 1

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The weighted average call rate was at 5.45% on Tuesday, versus 5.50% on Monday. The RBI will conduct another VRRR of ₹50,000 crore on Wednesday.

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