RBI injects Rs 84,582 cr via VRR auctions

Metro India News | MUMBAI

The Reserve Bank of India (RBI) on Monday infused Rs 84,582 crore into the banking system through two variable rate repo (VRR) auctions, aiming to manage short-term liquidity and ensure smooth functioning of financial markets.

In the first auction conducted early in the day, the central bank injected Rs 50,001 crore through a three-day VRR at a cut-off rate of 5.34 per cent, with the weighted average rate settling at 5.44 per cent. The auction witnessed strong demand, with banks placing bids worth Rs 57,287 crore against the notified amount of Rs 50,000 crore, indicating healthy liquidity requirements in the system.

Later in the day, the RBI conducted a second VRR auction, injecting an additional Rs 34,581 crore. This auction saw a slightly lower response, with bids falling short of the notified amount. The cut-off rate for this tranche stood at 5.26 per cent, while the weighted average rate came in at 5.30 per cent.

Despite these liquidity infusions, the overall liquidity position in the banking system remains in surplus, estimated at around Rs 1.27 lakh crore as of March 27. The central bank has been actively using VRR auctions in recent days to fine-tune liquidity conditions and address short-term mismatches in cash flows.

Notably, over the past few days, the RBI has injected Rs 2.73 lakh crore of transient liquidity through VRR auctions across different tenures. In addition, since January 2026, the central bank has infused Rs 3.50 lakh crore of durable liquidity via open market operations (OMO), involving the purchase of government securities.

The continued liquidity support reflects the RBI’s calibrated approach to maintaining stability in money markets while ensuring adequate funds are available to support economic activity.