Mumbai: The RBI's ₹50,000 crore liquidity-draining operation drew barely half its size on Tuesday, with banks bidding ₹23,905 crore, a sign that the surplus in the banking system is not spread evenly.
The central bank announced the variable rate reverse repo (VRRR) after system liquidity touched nearly ₹2 lakh crore on Monday. In a VRRR, banks park surplus cash with the RBI for a set tenor and earn interest on it.
The weighted average call rate, the rate at which banks lend to each other overnight, eased to 5.45% on Tuesday from 5.50% a day earlier.
The muted response points to an asymmetry in the surplus, with the cash sitting with a narrower set of lenders than the headline liquidity number suggests. The RBI will run another ₹50,000 crore VRRR on Wednesday.
Liquidity management matters because it feeds directly into short-term rates and, from there, into how quickly policy transmission reaches borrowers. When the system is flush, call rates slide below the repo rate; when it tightens, they climb.
For now, the numbers suggest the system is comfortable rather than strained. A second operation of the same size on Wednesday will test whether Tuesday's thin bidding was a one-off or the start of a pattern.
The RBI has been using a mix of instruments to keep the overnight rate anchored near its policy stance. How much of the ₹50,000 crore gets absorbed each time is the number traders will watch.