RBI’s 7-day VRRR auction undersubscribed as banks favor lending in overnight market

The RBI’s seven-day VRRR auction was undersubscribed as banks favored lending in the overnight market due to higher rates. Lower participation was also linked to CRR reporting on Friday. The auction aimed to manage liquidity and keep overnight rates within the LAF corridor, signaling the RBI’s discomfort with a large liquidity surplus, currently at ₹3.15 lakh crore.

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