The Reserve Bank of
T India (RBI) on Monday
conducted two four-
day variable rate repo (VRR)
auctions to infuse liquidity
into the banking system. The
liquidity deficit in the system
widened to %1.93 trillion
on Sunday.
The central bank conducted
two VRR auctions in a day for
the first time on Friday, follow-
ingsix fine-tuning variable rate
reverse repo (VRRR) auctions
between February 2 and 7. This
included two one-day VRRR
auctions on February 6 and 7.
“Because of the strong
demand at the first auction,
they might have come up with
the second one,” a dealer at a
state-owned bank said. “We
are not able to figure out the
exact reason why they are con-
ducting two auctions. They
could have come up with a
larger amount at a single auc-
tion,” he added.
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