RBI Announces ₹2.5 Lakh Crore Liquidity Infusion Through VRR Auctions
| Key Aspect | Details |
|---|---|
| Why in News? | RBI is injecting ₹2.5 lakh crore into the banking system through Variable Rate Repo (VRR) auctions to address liquidity shortages caused by forex interventions and fiscal outflows. Daily VRR auctions will be conducted, with reversals the next working day. |
| Liquidity Infusion Amount | ₹2.5 lakh crore |
| Method Used | Variable Rate Repo (VRR) auctions |
| Frequency | Daily auctions on working days |
| Reason for Liquidity Shortage | Forex market interventions, fiscal outflows, and economic conditions |
| Repo Rate Cut | 25 basis points (bps), now at 6.25% |
| Bond Purchases by RBI | Increased to ₹40,000 crore |
| Future Measures Expected | Open Market Operations (OMO), forex swaps if liquidity tightens further |
| Liquidity Coverage Ratio (LCR) Implementation | Deferred to March 31, 2026 |
| RBI Governor | Sanjay Malhotra |
| RBI Headquarters | Mumbai |