RBI liquidity management operations

Still running. 2 entries so far, over 4 days from 5 September 2026.

01
5 September

RBI liquidity absorption via VRRR

RBI conducted two variable rate reverse repo (VRRR) auctions to absorb liquidity from the banking system.
Total liquidity absorbed through these auctions amounted to over ₹6.02 lakh crore.
The first auction (three-day) saw bids of ₹5,41,975 crore against a notified amount of ₹7 lakh crore.
The second auction (three-day) saw banks park ₹60,419 crore against a notified amount of ₹1.5 lakh crore.
Banking system liquidity surplus was estimated at approximately ₹10.32 lakh crore as of September 3.
Increased liquidity absorption is attributed to large inflows from the special FCNR(B) deposit scheme.
Special forex measures mobilized $136.38 billion by August 31, comprising $127.23 billion (FCNR(B)), $5.26 billion (OFCBs), and $3.89 billion (ECBs).

02
8 September

The Reserve Bank of India (RBI) conducted two liquidity mop-up auctions to manage excess funds in the banking system.
A 30-day Variable Rate Reverse Repo (VRRR) auction was held with a notified amount of ₹7 lakh crore, receiving bids of ₹2.59 lakh crore.
The 30-day VRRR auction saw a cut-off and weighted average rate of 5.24%.
An overnight VRRR auction was subsequently conducted with a notified amount of ₹5 lakh crore.
The overnight VRRR auction received bids of ₹3,53,390 crore, representing over 70% of the notified amount.
The overnight VRRR auction was accepted at a cut-off and weighted average rate of 5.24%.
Market response indicated a preference among lenders for parking funds for shorter tenures compared to longer-term instruments.

Newest first. A story that ran for 4 days is exactly the kind the mains paper asks about as one question.

Explain the mechanism of Variable Rate Reverse Repo (VRRR) auctions and discuss why the Reserve Bank of India utilizes these tools for liquidity management in the banking system. 150 words · 8 September
Analyze the role of the Reserve Bank of India in managing surplus liquidity within the Indian economy. How do instruments like VRRR auctions reflect the central bank's stance on monetary policy and financial stability? 250 words · 8 September
Explain the mechanism of Variable Rate Reverse Repo (VRRR) auctions and discuss why the Reserve Bank of India utilizes this tool to manage surplus liquidity in the banking system. 150 words · 5 September
The influx of foreign currency deposits has significantly impacted domestic liquidity conditions. Analyze the role of the Reserve Bank of India in maintaining monetary stability amidst large capital inflows and the challenges associated with managing excess liquidity. 250 words · 5 September

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