BUZZ — Indian lenders redeem one — third of long — term reverse repo funds early

Indian banks aggressively withdrew funds from longer-duration variable rate reverse repos (VRRRs) conducted by the RBI earlier this month Banks exercised the early redemption option on 1.04 trillion rupees ($10.85 billion) of reverse repos that were due to mature on October 7 Lenders had parked aggregate of 3.20 trillion rupees under two such auctions on September 7 and September 11 "The whole purpose of removing liquidity for a larger period is defeated, and that is what we had pointed out before these operations were conducted," trader with a primary dealership says Adds that the concept of clarity on liquidity outlook is not at the centre of the long term VRRRs Banking system liquidity surplus declines to 4.34 trillion rupees, over 60% below peak of 11.16 trillion rupees hit on September 6 ($1 = 95.8825 Indian rupees) (Reporting by Dharamraj Dhutia) ((dharamraj.dhutia@tr.com)