Now Reading: RBI to conduct Rs 1.5 lakh crore reverse repo auction on August 21
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RBI to conduct Rs 1.5 lakh crore reverse repo auction on August 21
The Reserve Bank of India (RBI) will conduct a three-day Variable Rate Reverse Repo (VRRR) auction on Friday, August 21, 2026, for a notified amount of Rs 1,50,000 crore under the Liquidity…
The Reserve Bank of India (RBI) will conduct a three-day Variable Rate Reverse Repo (VRRR) auction on Friday, August 21, 2026, for a notified amount of Rs 1,50,000 crore under the Liquidity Adjustment Facility (LAF). The auction window will be open from 9:30 AM to 10:00 AM, and the funds will be reversed on Monday, August 24, 2026.
The decision was taken after a review of current and evolving liquidity conditions. The operational guidelines for the auction will remain the same as outlined in the RBI's press release dated February 13, 2020.
Indian Opinion Analysis
The VRRR auction allows the RBI to absorb excess liquidity from the banking system, typically when surplus cash threatens to push short-term rates below the policy repo rate. A notified amount of Rs 1.5 lakh crore is significant and suggests the central bank sees durable surplus liquidity that needs managing. This is a routine but closely watched operation because it signals the RBI's comfort with current money market conditions. The key number to watch after the auction is the cut-off rate, which reveals how aggressively banks are parking funds with the RBI and thus the actual depth of surplus liquidity.
Source: rbi.org.in
This story was synthesised by AI from the source linked above.
