RBI will conduct a ₹2 lakh crore 3-day Variable Rate Reverse Repo (VRRR) auction on October 12, 2026, to absorb excess liquidity. The auction will reverse on October 15, 2026.
RBI to Absorb Liquidity via ₹2 Lakh Crore VRRR
The Reserve Bank of India has announced a Variable Rate Reverse Repo (VRRR) auction under the Liquidity Adjustment Facility (LAF) for October 12, 2026. The auction will have a tenor of three days, a notified amount of ₹2,00,000 crore, and will reverse on October 15, 2026. The bidding window will remain open from 9:30 AM to 10:00 AM.
This operation reflects the RBI’s assessment of current and evolving liquidity conditions, indicating a move to mop up excess systemic liquidity. The three-day duration suggests a near-term tightening of monetary conditions, possibly in response to transient liquidity surpluses from government transactions or capital inflows.
Market participants and legal advisors should monitor the auction's weighted cut-off rate as an indicator of near-term monetary stance. The use of VRRR—rather than fixed-rate repos—allows the RBI to manage absorption more precisely based on market demand, underscoring its calibrated approach to liquidity management in the current cycle.