Now Reading: RBI to absorb Rs 1.25 lakh crore via 3-day reverse repo auction
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RBI to absorb Rs 1.25 lakh crore via 3-day reverse repo auction
The Reserve Bank of India will conduct a 3-day Variable Rate Reverse Repo (VRRR) auction on August 11, 2026, to absorb Rs 1.25 lakh crore from the banking system. The auction, part…
The Story in Brief
The Reserve Bank of India will conduct a 3-day Variable Rate Reverse Repo (VRRR) auction on August 11, 2026, to absorb Rs 1.25 lakh crore from the banking system. The auction, part of the Liquidity Adjustment Facility (LAF), will run from 9:30 AM to 10:00 AM, with funds reversed on August 14, 2026.
The RBI said the decision follows a review of current and evolving liquidity conditions. Operational guidelines from a February 2020 press release remain unchanged.
The Indian Opinion
The RBI’s Rs 1.25 lakh crore reverse repo auction is a measured step, not a panic move. Some commentators call it a liquidity squeeze before elections, but the central bank has repeatedly said it is managing surplus cash. The real test is whether banks actually bid at the notified amount; if they undersubscribe, the surplus is bigger than thought. That number, the bid coverage ratio, will tell us if the system is truly awash in cash or just cautious.
Source: rbi.org.in
This story was synthesised by AI from the source linked above.
