RBI: Result of 8-day VRRR auction held on Sept 04, 2025 Sep 04

RBI: Result of 8-day VRRR auction held on Sept 04, 2025 Sep 04

The Reserve Bank of India (RBI) successfully conducted an eight-day variable rate reverse repo (VRRR) auction on Thursday, September 4, 2025. The auction was aimed at absorbing surplus liquidity from the banking system, totaling ₹1.5 trillion [1].

The net liquidity in the banking system was in surplus by ₹3.03 trillion on Tuesday, as per the latest data from the central bank. The VRRR operations are designed to anchor short-term rates closer to the policy repo rate, which is currently set at 5.35% [1].

During the auction, the cut-off yield on 182-day and 364-day treasury bills was set at 2 basis points and 3 basis points higher, respectively, compared to the previous week. The yield on 91-day treasury bills remained unchanged at 5.51% [1].

The WACR, the operating target of monetary policy, settled at 5.35% on Wednesday, down from the previous close of 5.39% [1].

The VRRR auction is part of the RBI's efforts to manage liquidity conditions in the banking system and ensure that short-term interest rates remain aligned with its monetary policy objectives.

References:
[1] https://www.business-standard.com/economy/news/rbi-to-conduct-8-day-vrrr-to-absorb-rs-1-5-trillion-125090301417_1.html