RBI to conduct Overnight Variable Rate Reverse Repo (VRRR) auction under LAF on September 08, 2026
RBI 7 Sept·7 Sept 2026, 2:00 pm
Economy RBI
The Reserve Bank of India (RBI) has announced a Variable Rate Reverse Repo (VRRR) auction for a total amount of ₹5 lakh crore. This operation is scheduled for September 8, 2026, with the funds to be deposited for a single day and reversed on the following day. The auction will be conducted between 9:30 AM and 10:00 AM on that date.
This move is a standard liquidity management tool used by the central bank to drain excess cash from the banking system. By offering a rate of interest on these deposits, the RBI encourages banks to park their surplus funds temporarily. This helps maintain a balance in the money market and ensures that liquidity is neither too abundant nor too tight.
For investors, this auction signals the RBI's intent to manage short-term liquidity. It indicates that the central bank is absorbing funds to prevent an oversupply of cash in the system. Investors should watch for the VRRR rate announced during the auction, as it reflects the current stance of monetary policy and the RBI's view on liquidity conditions.
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