RBI to infuse Rs 1 lakh cr through term repo auction

In a bid to provide additional liquidity to the system hit by the coronavirus outbreak, the Reserve Bank of India (RBI) decided to inject Rs 1 lakh crore and assured such move further also if required.

The first tranche of term repo worth Rs 50,000 crore was conducted on Monday, while the second tranche of the same amount will be conducted on Tuesday.

As a pre-emptive measure to meet any frictional liquidity requirements on account of dislocations due to the coronavirus outbreak, the RBI has decided to conduct the fine-tuning variable rate repo auctions for Rs 1 lakh crore, the central bank said in a statement.

The RBI's move is aimed at providing cheaper money to banks at the repo rate, thus improving liquidity in the banking system.