VARIABLE RATE REVERSE REPO

On 7th September 2026, the Reserve Bank of India (RBI) conducted a 30-day Variable Rate Reverse Repo (VRRR) auction to absorb surplus liquidity from the banking system.

What is VRRR?

  • VRRR is a liquidity-management tool through which the RBI absorbs excess liquidity from banks for a specified period through an auction.
  • It helps the RBI manage short-term liquidity and money-market conditions.
  • The interest rate is determined through competitive bidding, rather than being fixed by the RBI.

How Does VRRR Work?

  1. The RBI announces the amount and tenor of the auction.
  2. Banks submit bids specifying the amount and interest rate at which they are ....
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