New Delhi, June 23:The Reserve Bank of India (RBI) on Tuesday injected ₹1.41 lakh crore into the banking system through a seven-day Variable Rate Repo (VRR) auction to address short-term liquidity pressures.
According to the central bank, ₹1,41,171 crore was infused at a cut-off rate and weighted average rate of 5.26 percent.
The liquidity support came after the banking system slipped into a deficit of ₹19,971.89 crore on June 22, reversing the surplus of ₹30,685.11 crore recorded a day earlier. Market participants attributed the sudden liquidity squeeze primarily to outflows related to Goods and Services Tax (GST) payments.
The liquidity shortfall has pushed up overnight money market rates. The weighted average call money rate was trading at 5.43 percent, around 18 basis points above the RBI’s benchmark repo rate. Likewise, tri-party repo (TREPS) rates were quoted 5–7 basis points higher than the repo rate.
Over the past several days, the RBI has been actively injecting short-term liquidity as the banking system faced pressure from advance tax and GST-related outflows. The central bank has infused nearly ₹2.43 lakh crore through VRR auctions of varying maturities to ensure adequate liquidity and maintain stability in money market rates.
Recent liquidity operations include an overnight VRR infusion of ₹36,300 crore on Monday, a three-day VRR auction worth ₹16,750 crore on Friday, and two VRR auctions totaling ₹72,300 crore on Wednesday. Earlier, the RBI injected ₹89,440 crore through a seven-day VRR auction on June 16 and ₹28,220 crore via an overnight VRR auction on June 15.
These measures reflect the central bank’s efforts to manage temporary liquidity mismatches and keep short-term borrowing costs aligned with its monetary policy stance.
