Mumbai, Sept. 16 -- The Reserve Bank of India (RBI) on Tuesday absorbed Rs 585 crore through a three-day Variable Rate Repo (VRR) auction, a fraction of the notified amount of Rs 75,000 crore.

Banks tendered bids worth only Rs 585 crore, all of which were accepted by the central bank. The cut-off rate was set at 5.51%, while the weighted average rate came in slightly higher at 5.52%.

The tepid response comes in contrast to the RBI's recent liquidity absorption operations. On 12 September, the central bank had absorbed Rs 1.5 lakh crore in a three-day VRRR auction against bids of Rs 1,50,804 crore. This followed an 8-day VRRR on 4 September where Rs 1.5 lakh crore was absorbed, and a two-day VRRR on 10 September that saw Rs 20,175 crore ...