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Informist, Friday, Dec. 12, 2025

--RBI to hold 11-day VRR auction for INR 750 bln Mon

--RBI to hold 11-day VRR auction for INR 750 bln 0930-1000 IST Mon 

--RBI to hold 10-day VRR auction for INR 750 bln Tue 

--RBI to hold 10-day VRR auction for INR 750 bln 0930-1000 IST Tue 

 

MUMBAI – The Reserve Bank of India will hold an 11-day variable rate repo auction for INR 750 billion from 0930 IST to 1000 IST Monday, and another 10-day variable rate repo auction for INR 750 billion at the same time Tuesday, the central bank said Friday. The reversal of both tenders will take place on Dec. 26.

 

The auctions take place amid significant outflows for advance tax payments Monday and Tuesday, which may add up to around INR 1.5 trillion, according to market participants. The unusual length of the operations is likely to provide banks a liquidity buffer through the goods and services tax outflows around Dec. 20 as well.

 

The maturity of the auctions will coincide with the government's routine month-end spending, which eases banking system liquidity, dealers said. The RBI may also conduct further liquidity fine-tuning operations around that time to ensure the weighted average call rate remains near the policy repo rate of 5.25%, they said.

 

As per the RBI's latest data, the central bank's net absorption from the banking system--a proxy for the liquidity surplus--was INR 1.84 trillion Thursday, up from INR 1.66 trillion Wednesday. The central bank's bond purchases of INR 1 trillion will add to banking system liquidity between Friday and Dec. 19.

 

Both variable rate repo auctions will be conducted on the RBI's core banking solution platform, e-Kuber. Successful bids will be accepted at their respective bid rates. Bids at or below the repo rate of 5.25% would be rejected.

 

This will be the first fine-tuning operation to inject liquidity in December, after the RBI conducted variable rate reverse repo operations earlier in the month. On Nov. 21, the RBI had held a seven-day variable rate repo auction for INR 500 billion and accepted all INR 163.63-billion bids at a 5.51% cut-off.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Janwee Prajapati

Edited by Rajeev Pai

 

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