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RBI Skips 14-Day VRR Auction for Third Straight Fortnight

17 April 20251 min read
BANKING & FINANCERBI Skips 14-DayVRR Auction forThird StraightFortnight17 April 2025safalsetu.com

Why in the news

For a third straight fortnight, the RBI did not hold its main 14-day Variable Rate Repo (VRR) auction, sparking talk of a change in how it manages liquidity.

Key facts

  • Period skipped: April 17 to May 2.
  • The 14-day repo has been the core tool for adjusting system liquidity under the present framework.
  • Substitutes: 1-day and 5-day short-term operations and daily variable rate repos.
  • Governor Sanjay Malhotra said the liquidity framework is under review, hinting at a formal recalibration.

Possible direction

  • A more flexible toolkit instead of fixed 14-day cash infusions.
  • Money market rates may track the policy repo rate more closely, with quicker response to cash conditions.

Exam angle

  • Skipped tool: 14-day VRR (three fortnights running).

Test yourself

1. Which RBI operation was withheld for the fortnight of April 17 to May 2, 2025?

RBI did not hold its 14-day Variable Rate Repo auction.

2. How many consecutive fortnights had RBI gone without its standard 14-day liquidity operation?

The report calls it the third consecutive fortnight.

3. Which RBI Governor said that parts of the liquidity framework were under review?

Governor Sanjay Malhotra made the statement.

This topic is part of Daily Current Affairs 17 April 2025 (21 topics).

All topics of the dayDay quizApril 2025

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