The Reserve Bank of India (RBI) will conduct ₹2 trillion Variable Rate Reverse Repo (VRRR) seven days later on Friday.
“In view of the surplus transient liquidity conditions prevailing now, it has been decided to conduct a VRRR auction on Friday,” the central bank said in a release.
The auction will take place between 2 pm and 2:30 pm, and the reversal of these funds will take place on April 17.
The liquidity in the banking system turned huge surplus on the back of maturity of government securities (G-Secs).
G-Secs worth ₹31,329 crore have matured on April 8. Further, maturities scheduled on April 12 and April 17, are worth ₹86,403 crore and ₹34,791 crore, respectively.
Currently, the liquidity in the banking system is expected to be in surplus of around ₹4.55 trillion as on April 9, RBI data showed.
“Going ahead, we will continue to be proactive and pre-emptive in liquidity management and ensure sufficient liquidity in the banking system to meet the productive requirements of the economy,” RBI Governor Sanjay Malhotra said after the monetary policy review earlier this week.