RBI balances liquidity absorption with calendar on bond purchase

Central bank announces variable rate reverse repo auctions (VRRR) to suck out liquidity

The Reserve Bank of India (RBI) orchestrated a perfect balancing act of sucking out liquidity and at the same time infusing liquidity with bond purchases in the first bimonthly monetary policy review of this financial year.

The central bank announced a variable rate reverse repo auctions (VRRR) to suck out liquidity, and on the other hand announced a calendar for bond purchases: a move that cheered the bond market.

The RBI’s six-member monetary committee decided to maintain a status quo for the fifth consecutive policy meeting while continuing with the accommodative stance, but refrained from giving a guidance on how