In a 2-day variable rate repo auction, RBI devolved no funds on itself and allotted the entire 873.47 billion rupees it received in bids, below the 1.25 trillion rupees on offer. The cutoff and weighted average rate were both set at 5.26%, indicating stable short-term funding costs and comfortable system liquidity.
India’s central bank conducted a 2-day VRR operation to fine-tune system liquidity and anchor overnight money-market rates closer to the policy corridor. Against the 1.25 trillion rupees notified amount, banks bid for only 873.47 billion rupees, suggesting that liquidity conditions, while not excessive, remain broadly adequate.
RBI accepted the full bid amount, setting both the cut-off and weighted average rate at 5.26%, a level consistent with recent money-market prints and marginally above the standing deposit facility rate. The outcome underscores the central bank’s preference for calibrated liquidity injections that keep rates aligned with its tight but orderly policy stance.
Key Highlights
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Total bids: 873.47 billion rupees versus notified 1.25 trillion rupees, indicating under-subscription and restrained liquidity demand.
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Allotted amount: 873.47 billion rupees, with no partial acceptance or rejection of bids.
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Cut-off and weighted average rate: 5.26% for the 2-day VRR tenor, signalling stability in very short-term funding costs.
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Liquidity signal: Outcome points to balanced system liquidity, with banks not scrambling for funds ahead of near-term tax and government borrowing-related flows.
Sources: Live auction data and money-market reports from leading financial news and information providers