The Reserve Bank of India has announced a Second Overnight Variable Rate Reverse Repo (VRRR) auction for ₹75,000 crore on August 18, 2026. The auction aims to address current liquidity conditions and will be held between 12:00 PM to 12:30 PM.
RBI Announces Second Overnight VRRR Auction for ₹75,000 Crore
The Reserve Bank of India (RBI) is set to conduct a Second Variable Rate Reverse Repo (VRRR) auction on August 18, 2026, with a notified amount of ₹75,000 crore. This decision comes as part of the central bank's efforts to manage liquidity in the financial system, ensuring both stability and efficiency in money market operations.
The auction will have a tenor of one day and will take place from 12:00 Noon to 12:30 PM with the date of reversal set for August 19, 2026. The VRRR auction is designed to absorb excess liquidity in the banking system, which is crucial in maintaining the desired liquidity levels that align with the RBI's monetary policy objectives.
Practitioners should note the implications of this auction on short-term borrowing rates and liquidity management strategies within their portfolios. The auction results will directly influence the operational liquidity conditions in the financial markets, which can affect borrowing costs for banks and financial institutions.