RBI VRRR Auctions Attract ₹1.91 Lakh Crore Bids
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RBI received ₹1.91 lakh crore in bids against ₹1.5 lakh crore at Thursday’s VRRR auctions as surplus liquidity pushed overnight rates lower. The central bank will conduct another three-day ₹1.5 lakh crore auction on Friday.
The Reserve Bank of India (RBI) received cumulative bids of ₹1.91 lakh crore against the notified ₹1.5 lakh crore at two overnight variable rate reverse repo (VRRR) auctions on Thursday. Banks parked the notified ₹1.5 lakh crore with the RBI at a weighted average rate of 5.24%.
Why Did RBI Receive Strong Demand At The VRRR Auction?
Market participants attributed the strong demand to softer overnight rates. With surplus funds available in the banking system, banks found the RBI's VRRR more attractive than prevailing overnight market rates.
The weighted average call rate (WACR), the operating target of monetary policy, settled at 5.17%, compared with 5.15% in the previous session.
How Much Surplus Liquidity Is In The Banking System?
Net liquidity in the banking system stood at a surplus of ₹3.70 lakh crore on Wednesday, according to the latest RBI data.
The surplus has also pushed some overnight rates below the RBI's standing deposit facility (SDF) rate of 5%. The overnight tri-party repo (TREPS) rate rose to 5.06% on Thursday from 4.96% previously, after having slipped below the 5% SDF rate.
Market participants said the RBI's liquidity operations are aimed at keeping overnight rates closer to the policy repo rate, which currently stands at 5.25%.
What Is RBI Planning For Friday's VRRR Auction?
The RBI will conduct another three-day VRRR auction worth ₹1.5 lakh crore on Friday, 21 August 2026. The operation is intended to temporarily absorb surplus funds from banks and help keep short-term market rates aligned with the monetary policy framework.
The latest auction comes as the banking system continues to hold substantial surplus liquidity, creating downward pressure on overnight borrowing rates.
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Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
