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Listen to this article in summarized format The central bank has been conducting VRRR auctions almost every day to manage the surplus liquidity, which could potentially add to inflationary pressures. The excess liquidity also led the weighted call money rate to 4.95%, significantly below the policy rate. The RBI typically endeavours to align overnight call rates as close as possible to the policy repo rate, which stands at 5.25%. "Based on the flows from FCNR-B and other schemes, core or durable liquidity surplus that was at ₹8.06 lakh crore as of August 15 may cross ₹15 lakh crore by end of September," ICICI Securities said in a note. Announcing the long-term VRRR auction Friday, RBI said participating banks can opt for premature reversal. Requests for premature reversal can be placed at least two working days prior to the original date of reversal. Market response to the three-day variable rate reverse repo auctions, which the central bank conducted Friday, fell short of the earmarked quota. The regulator mobilised a total of ₹6.02 lakh crore through two separate VRRR auctions against the cumulative notified amount of ₹8.5 lakh crore. Surplus liquidity in India's banking system surged to a record high of ₹10.3 lakh crore as of September 3, forcing the central bank to step up liquidity absorption operations. Record inflows exceeding $130 billion through the forex-inflow programs and the following dollar-rupee swaps are contributing to the massive liquidity overhang. Meanwhile, the central bank sold two government papers -- one new stock and the 7.71% 2066 stock for a total ₹32,000 crore Friday. The new five-year stock saw the cut-off yield settling at 6.53% while the 7.71% 2066 paper saw the cut-off yield at 7.6618%, the RBI said. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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