RBI absorbs ₹2.90 lakh crore via two VRRR auctions amid huge surplus liquidity
BusinessLine 1 hr ago·16 Sept 2026, 8:28 am
The Reserve Bank of India (RBI) has absorbed a massive ₹2.90 lakh crore from the banking system through two Variable Rate Reverse Repo (VRRR) auctions. This action was taken to drain the excess liquidity currently available in the market, which has been accumulating due to various factors.
This move is significant for investors as it signals the central bank's effort to manage money supply. By pulling out funds, the RBI aims to prevent an oversupply of cash from driving down short-term interest rates. This is a standard tool used to ensure financial stability and control inflationary pressures.
Investors should watch the trend in upcoming liquidity management operations. If the RBI continues to absorb large sums, it could tighten liquidity further. Conversely, if the absorption slows down, it may indicate a return to a more abundant cash environment, affecting short-term borrowing costs.
Excerpt from BusinessLine
The Reserve Bank of India (RBI) on Wednesday absorbed ₹2.90 lakh crore through two variable rate reverse repo (VRRR) auctions from the banking system amid a huge surplus. In the first auction, the central bank received bids worth ₹3,17,088 crore for a notified amount of ₹2.50 lakh crore. However, it accepted only…Read the original at BusinessLine
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