The Reserve Bank of India conducted multiple Variable Rate Reverse Repo (VRRR) auctions on September 29 and 30, 2026, to manage short-term liquidity. Total accepted amounts exceeded ₹2.4 lakh crore at a uniform cut-off rate of 5.24%.
RBI Conducts VRRR Auctions to Manage Liquidity
The Reserve Bank of India (RBI) conducted a series of Overnight Variable Rate Reverse Repo (VRRR) auctions under the Liquidity Adjustment Facility (LAF) on September 29 and 30, 2026, to absorb excess liquidity from the system. These auctions were held in response to evolving liquidity conditions, with the aim of stabilizing short-term money market rates.
On September 29, two auctions were conducted. The first had a notified amount of ₹2,00,000 crore, with ₹1,19,048 crore accepted at a cut-off rate of 5.24%. A second auction later that day, notified for ₹1,00,000 crore, saw ₹33,770 crore accepted, also at 5.24%. On September 30, another VRRR auction of ₹2,00,000 crore was conducted, with ₹85,424 crore accepted at the same rate. The weighted average rate in all auctions was 5.24%, indicating stable market expectations.
These operations form part of the RBI's routine monetary management tools to calibrate liquidity. The consistent cut-off rate across multiple auctions suggests a steady interest rate outlook. For market participants, the partial acceptance in auctions reflects strong but not excessive liquidity absorption, signaling a balanced approach by the central bank in managing systemic liquidity without inducing rate volatility.