On November 4, 2026, the RBI conducted an Overnight Variable Rate Reverse Repo (VRRR) auction, accepting ₹50,015 crore at a cut-off rate of 5.49%. The auction saw strong demand with total bids amounting to ₹73,907 crore, indicating tight liquidity conditions.
RBI Absorbs Liquidity via VRRR Auction
The Reserve Bank of India conducted an Overnight Variable Rate Reverse Repo (VRRR) auction on November 4, 2026, under the Liquidity Adjustment Facility (LAF), accepting ₹50,015 crore out of ₹73,907 crore in total bids received. The notified amount was ₹50,000 crore for a tenor of one day, with the cut-off and weighted average rate both at 5.49%.
This follows a similar auction on November 3, where ₹23,905 crore was accepted at the same rate, suggesting sustained demand for short-term liquidity absorption. The partial acceptance at the cut-off rate on November 4 stood at 67.64%, reflecting active participation from banks seeking to park surplus funds. Such operations are part of the RBI’s calibrated liquidity management to anchor short-term interest rates near the policy repo rate.
For practitioners advising banks and financial institutions, these operations underscore the importance of real-time liquidity monitoring and understanding RBI's evolving stance on monetary transmission. Continued VRRR activity may indicate tightening liquidity, with potential implications for borrowing costs and cash management strategies.
