RBI withdraws ₹3.93352L/cr via VRRR to curb cash surplus
The Reserve Bank of India just pulled ₹3,93,352 crore out of the banking system through a VRRR auction, aiming to deal with a major cash surplus that had built up by September 11.
Basically, too much idle money was floating around, and the RBI wanted to keep things balanced, so it accepted all bids at an average rate of 5.24%.
RBI to sell ₹1L/cr bonds
This flood of extra cash happened mostly because of big deposits from abroad (FCNR (B)) and government spending on salaries and pensions.
To keep interest rates steady and avoid any market hiccups, the RBI is also planning to sell government bonds worth ₹1 lakh crore in three rounds this month: ₹50,000 crore on September 17, then ₹25,000 crore each on September 21 and 28.
It's all about keeping the financial system running smoothly without too many surprises.