RBI launches 30-day VRRR on Sept 7 to absorb 7L/cr
Business
The Reserve Bank of India (RBI) is stepping in to handle a flood of extra money in the banking system.
On September 7, it's launching a 30-day VRRR (Variable Rate Reverse Repo) auction to pull out ₹7 lakh crore, after huge foreign currency inflows pushed surplus cash to record highs.
RBI sold 32,000 cr bonds
On Friday, RBI tried shorter auctions but didn't hit its target, and experts think the cash pile could grow even more by month-end.
To keep things balanced, RBI also sold ₹32,000 crore worth of government bonds.
Banks joining the upcoming auction can request early withdrawals if needed, so everyone gets a bit more flexibility this time around.