Mumbai, Jan 5 (PTI) Bankers have bid 2.8 times more at the variable reverse repo (VRR) auction held on Friday, as the notified amount was only Rs 1 lakh crore, according to the Reserve Bank data on the auction result earlier in the day.

The central bank, in a statement, said it has accepted bids worth Rs 1,00,009 crore at a cut-off rate of 6.68 per cent and the weighted average cut-off rate of 6.69 per cent, and the auction saw bids worth Rs 2,77,402 crore or 2.77 times more than the offer.

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The banking system will need higher liquidity as the GST payout is nearing.

The statement also said the partial allotment percentage of bids received at the cut-off rate stood at 36.68.

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The RBI began short-term VRR under the LAF (liquidity adjustment facility) for Rs 50,000 crore on January 20, 2022. The auction will have a seven-day tenor, that's January 12, 2024, the monetary authority said in a statement.

Since then, the Reserve Bank has been rebalancing the surplus liquidity in the system by shifting it out of the fixed rate overnight reverse repo window into the variable rate reverse repo (VRR) auctions of longer maturity.

The VRR auction was conducted on the CBS (e-Kuber) platform, and the minimum bid amount for the auction was Rs 1 crore and multiples thereof.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)