Why does RBI drain cash overnight? The VRRR auction under LAF that Prelims economy questions test
RBI conducts an overnight Variable Rate Reverse Repo auction
খবরে কেন? RBI uses a VRRR auction to mop up surplus liquidity.
প্রিলিমস The Liquidity Adjustment Facility includes repo and reverse repo operations through which RBI manages day-to-day liquidity.
মেইনস GS3 Economy (monetary policy): surplus liquidity can weaken transmission of the policy rate and fuel inflation, so RBI uses LAF tools such as VRRR auc…


















