RBI to hold 15-day VRRR auction for INR 6 tln, largest since May 2022
This story was originally published at 20:35 IST on 28 August 2026
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--RBI to hold 15-day VRRR auction for INR 6.00 tln 0930-1000 IST Mon
MUMBAI – The Reserve Bank of India will conduct a 15-day variable rate reverse repo auction for INR 6.00 trillion between 0930 IST and 1000 IST Monday, the central bank said in a release. This is the largest notified amount for a tender to drain frictional liquidity since May 2022, when the RBI's Monetary Policy Committee began its last rate hike cycle.
This is also the first time since November 2024 that the central bank is conducting a VRRR auction of two weeks or longer. The reversal of Monday's tender will take place on Sept. 15. The auction will be reversed on the day when advance tax payments for the September quarter will drain liquidity from the banking system and into the government's coffers.
Durable liquidity was at an over-four-year high of INR 6.79 trillion as on Jul. 31 and is set to rise sharply by the end of August due to foreign currency non-resident (banks) deposits. Monday is the deadline to mobilise deposits under the RBI's special scheme to subsidise the entire hedging cost of the inflows.
The reversal of the the RBI's three-day VRRR auction for INR 3.00 trillion Friday will also add to liquidity with banks Monday. The central bank accepted all offers worth INR 1.53 trillion at the three-day tender. The RBI's net liquidity absorbed--a proxy for the systemic liquidity surplus--was INR 3.75 trillion Thursday, similar to INR 3.76 trillion Wednesday.
The VRRR auction will be conducted on the RBI's core banking solution platform e-Kuber. Successful offers will be accepted at their respective offer rates. Offers at or above the repo rate of 5.25% will be rejected, the RBI said. End
Reported by Meera Nair and Aaryan Khanna
Edited by Rajeev Pai
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