RBI absorbs Rs 20,175 crore in 2-day VRRR auction

The Reserve Bank of India (RBI) on Wednesday absorbed Rs 20,175 crore through a two-day Variable Rate Reverse Repo (VRRR) auction conducted as part of its liquidity management operations. The auction, held on 10 September 2025, had a notified amount of Rs 50,000 crore, but banks tendered bids worth only Rs 20,175 crore — all of which were accepted by the central bank. The cut-off rate and the weighted average rate stood at 5.49%. The operation follows RBI’s recent liquidity absorption exercises, including an 8-day VRRR on 4 September where Rs 1.5 lakh crore was absorbed against bids worth Rs 1.8 lakh crore, and shorter-tenor auctions held earlier in September. The central bank has been actively conducting VRRR auctions of varying maturities to manage surplus liquidity in the banking system, which has been elevated due to government spending and foreign capital inflows. These operations are aimed at keeping short-term money market rates closely aligned with the policy repo rate, which is currently at 5.50%.