RBI Moves To Mop Up Record Cash Glut, Plans To Lock Away ₹7 Lakh Crore Of Excess Banking Liquidity for 30 Days
Mumbai: The Reserve Bank of India (RBI) is stepping up its liquidity management efforts as India’s banking system grapples with a record pile-up of surplus cash following massive foreign currency inflows. The central bank will conduct a 30-day Variable Rate Reverse Repo (VRRR) auction worth Rs 7 lakh crore on Monday, marking a shift towards longer-duration liquidity absorption. RBI Targets Record…
The Reserve Bank of India (RBI) is taking decisive action to tackle a record cash glut in the banking system, which has been fueled by significant foreign currency inflows. In response, the central bank plans to conduct a 30-day Variable Rate Reverse Repo (VRRR) auction worth Rs 7 lakh crore, marking a shift towards longer-duration liquidity absorption.
This move aims to lock away surplus funds for a more extended period, thereby tightening its grip on short-term money market conditions. The RBI's policy push is expected to help India maintain a balance-of-payments buffer of up to $75 billion in FY27, while also helping to control inflationary pressures.
Brief written by urgent.news from Free Press Journal's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
