The Reserve Bank of India (RBI) will conduct a 4-day Variable Rate Repo (VRR) auction on October 26, 2026, for ₹1.5 lakh crore under the Liquidity Adjustment Facility (LAF). The reverse leg will be settled on October 30, 2026.
RBI to Inject Liquidity via 4-Day VRR Auction
The Reserve Bank of India (RBI) has announced a Variable Rate Repo (VRR) auction to be conducted on Monday, October 26, 2026, under the Liquidity Adjustment Facility (LAF). The notified amount for the auction is ₹1,50,000 crore, with a tenor of 4 days. Bidding will take place between 9:30 AM and 10:00 AM, and the reverse leg will mature on Friday, October 30, 2026.
The decision follows a review of current and evolving liquidity conditions in the financial system. The RBI regularly uses VRR auctions to manage short-term liquidity, especially during periods of fluctuating cash flows in the banking system. This particular auction suggests a temporary injection of liquidity, potentially aligned with government expenditure cycles or market volatility.
Implication for market participants: Banks and financial institutions should anticipate temporary liquidity infusion and adjust their overnight and short-term borrowing strategies accordingly. The 4-day window also provides an opportunity for fine-tuning portfolio durations in response to anticipated cash movements.
