The Reserve Bank of India conducted two overnight Variable Rate Reverse Repo (VRRR) auctions on October 5, 2026, under the Liquidity Adjustment Facility, totaling ₹2.5 lakh crore, to manage short-term liquidity. The first auction of ₹2 lakh crore saw a weighted average rate of 5.24%, with partial acceptance at the cut-off rate.
RBI Conducts Two Overnight VRRR Auctions to Manage Liquidity
The Reserve Bank of India (RBI) conducted two Variable Rate Reverse Repo (VRRR) auctions on October 5, 2026, under the Liquidity Adjustment Facility (LAF) to absorb surplus liquidity. The first auction, held between 9:30 AM and 10:00 AM, had a notified amount of ₹2,00,000 crore for a 1-day tenor. The second auction, conducted from 11:30 AM to 12:00 PM, was for ₹50,000 crore, also with a 1-day tenor, maturing on October 6, 2026.
The results of the first auction were announced with total bids amounting to ₹2,10,688 crore, out of which ₹2,00,050 crore was accepted at a cut-off rate of 5.24%. The weighted average rate stood at 5.24%, with partial acceptance of 94.36% for bids submitted at the cut-off rate. The second auction’s results were not immediately disclosed. These operations reflect the RBI’s active liquidity management amid evolving monetary conditions.
For financial institutions and market participants, such operations are critical for short-term cash management and signal the central bank’s stance on liquidity absorption. The frequency and size of VRRR auctions provide insight into systemic surplus levels and may influence call money rates and short-term yields. Practitioners should monitor RBI’s daily liquidity operations for trends in monetary policy implementation.