(Reuters) – India’s central bank has decided not to conduct a 14-day variable rate repo auction for the fortnight ending April 17, following a review of liquidity conditions, it said on Thursday.
The Reserve Bank of India infuses liquidity in the banking system using repos and sucks it out using reverse repos.
India’s banking system liquidity surplus is set to widen to five-month high to around 2.5 trillion rupees in coming days amid government spending and the RBI’s bond purchase, traders told Reuters earlier in the day.
Banking system liquidity moved into surplus on March 29, after being in deficit since mid-December. The surplus stood at 1.42 trillion rupees, as on April 1.
Reuters reported last week that the central bank may revert to providing fixed daily on-tap liquidity to banks.
(Reporting by Nishit Navin in Bengaluru; Editing by Shilpi Majumdar)
