The Reserve Bank of India's 14-day variable reverse repo rate (VRRR) auction on Friday saw a muted response from banks, predictably as it was announced at a time when the banking system liquidity had slipped into deficit earlier this week.
Banks parked only ₹2,476 crore of funds with the RBI, amounting to less than 10% of the notified amount worth ₹25,000 crore.
The system saw a deficit of ₹9,489 crore of liquidity, according to the latest available data on RBI. VRRR is the rate at which the central bank borrows from banks for a variable period through an auction process.
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