RBI's Bold Move: A Rs 2 Lakh Crore Liquidity Extraction

The Reserve Bank of India withdrew Rs 2,00,031 crore in liquidity from the banking system via a variable rate reverse repo auction. Amid high bids, the RBI targeted a Rs 2 lakh crore withdrawal at a 5.24% cut-off rate, maintaining a proactive approach to manage economic liquidity.

The Reserve Bank of India (RBI) strategically withdrew Rs 2,00,031 crore from the banking system's liquidity using a seven-day variable rate reverse repo (VRRR) auction.

This move comes after receiving Rs 2,28,098 crore in bids, surpassing the targeted Rs 2 lakh crore withdrawal rate. The auction cut-off was set at 5.24%.

Governor Sanjay Malhotra emphasized continued proactive liquidity management to support economic needs, noting a current surplus of around Rs 4.09 lakh crore.

(With inputs from agencies.)