RBI 8-day reverse repo weighted average rate is 5.49%

RBI 8-day reverse repo weighted average rate is 5.49%

The Reserve Bank of India (RBI) has maintained its 8-day reverse repo rate at 5.49% following its latest auction on August 14, 2025. The central bank's move underscores its commitment to managing surplus liquidity and ensuring stability in the banking system.

The auction saw bids worth ₹1.82 trillion, falling just short of the ₹2 trillion target set by the RBI. This indicates that the central bank is successfully drawing down surplus liquidity while keeping rates within the target corridor [1]. The current policy repo rate is set at 5.5%, with the standing deposit facility (SDF) at 5.25% and the marginal standing facility (MSF) at 5.75%.

The RBI's 8-day reverse repo auction highlights its effective management of surplus liquidity and commitment to maintaining stability in the banking system. The auction results and the RBI's broader policy framework underscore its balancing act between surplus management and interest rate stability.

In a separate statement, RBI Governor Sanjay Malhotra expressed hope that ongoing negotiations with the US will limit the impact of new tariffs. He emphasized the RBI's commitment to supporting growth while maintaining price stability. The governor also highlighted the strong foreign exchange reserves, which currently stand at $695 billion, sufficient to cover 11 months of merchandise exports [2].

The Federal Reserve's Federal Open Market Committee (FOMC) has been vocal about the need for rate cuts to prevent a potential collapse in the labor market. Federal Reserve Governor Christopher Waller supports a 25 basis point cut at the September meeting and anticipates additional rate cuts over the next three to six months [3].

The RBI's 8-day reverse repo auction reflects its proactive approach to liquidity management and monetary policy, which will continue to be closely watched by investors and financial professionals as global economic uncertainties persist.

References:
[1] https://www.angelone.in/news/market-updates/rbi-gets-31-025-crore-bids-at-vrr-auction-against-50-000-crore-notified
[2] https://www.financialexpress.com/policy/economy-hopeful-that-negotiations-will-lead-to-minimal-tariff-impact-rbi-governor-3957179/
[3] https://www.reuters.com/business/finance/feds-waller-sees-rate-cuts-over-next-3-6-months-starting-september-2025-08-28/