RBI soaks up ₹2.23 trillion in reverse repo auction as liquidity swells

The RBI accepted bids totalling ₹2,22,629 crore against a notified amount of ₹2.25 lakh crore in the variable rate reverse repo (VRRR) auction, with funds absorbed at a weighted average rate of 5.24 per cent, the central bank said in a statement.

The operation marks part of an ongoing effort by the RBI to manage excess liquidity in the banking system and keep overnight money market rates anchored to the repo rate. The central bank has been conducting VRRR auctions regularly since last month to address persistent surplus conditions.

Banking system liquidity stood at a surplus of approximately ₹6.94 lakh crore as of September 17, according to RBI data. To address the glut, the monetary authority on Thursday sold ₹50,000 crore in government securities through Open Market Operations, with two additional tranches of ₹25,000 crore each scheduled for September 21 and September 28.

The multi-pronged approach to liquidity management reflects the RBI's effort to maintain stability in money markets while keeping rates aligned with the repo corridor. The variable rate reverse repo facility allows the central bank to absorb funds at market-determined rates while maintaining operational flexibility.