RBI holds 1L cr VRR auction, injects 50K cr liquidity
Business
The Reserve Bank of India (RBI) is working hard to keep the banking system steady by tweaking how much money flows in and out.
Lately, it conducted a ₹1 lakh crore VRR auction and pumped in another ₹50,000 crore to tackle rising overnight lending rates, which have gone above its usual target.
RBI tightens liquidity amid overseas deposits
RBI's goal is simple: make sure interest rates don't get too wild and the financial system stays on track.
Recently, banks had way too much cash, thanks in part to huge deposits from overseas Indians, so RBI tightened things up by holding special auctions and temporarily raising how much cash banks had to set aside each day.