RBI Advances Variable Rate Repo Auction, Enhances Liquidity Facility For SPDs

On Tuesday, the Reserve Bank of India (RBI) announced two variable rate term repo auctions worth Rs 25,000 crore "to address any additional demand for liquidity and to provide flexibility to the banking system in year-end liquidity management."

The central bank also said that as a special case, Standalone Primary Dealers (SPDs) were also allowed to participate in these auctions along with other eligible participants.

"On a review of the rapidly evolving financial conditions and taking into account the impact of disruptions caused by COVID-19, it has been decided to advance the first auction scheduled for March 30, 2020 to March 26, 2020," RBI said

"There is no change in the auction scheduled for March 31, 2020. All other terms and conditions as applicable to term Repo auctions will remain the same," it added.

Further, RBI has decided to temporarily enhance liquidity available to SPDs under its Standing Liquidity Facility (SLF) from Rs 2,800 crore to Rs 10,000 crore with immediate effect, in order to facilitate year-end liquidity management by SPDs. This enhanced facility will be available till 17 April 2020 it said.