The Reserve Bank of India conducted an overnight Variable Rate Repo (VRR) auction, receiving bids worth ₹1,452.53 billion against a notified amount of ₹1,000 billion. RBI partially allotted 62.87% of bids at a weighted average cut-off rate of 5.51%, continuing strategic liquidity management in the banking system.
The Reserve Bank of India (RBI) carried out an overnight Variable Rate Repo (VRR) auction as part of its liquidity regulation measures on October 27, 2025. The central bank received bids totaling ₹1,452.53 billion, significantly exceeding the notified auction amount of ₹1,000 billion, signaling strong demand from market participants.
However, the RBI made a partial allotment, fulfilling 62.87% of the bid amount. The weighted average cut-off rate for the accepted bids was set at 5.51%, aligning closely with current policy interest rates. This auction reflects RBI’s ongoing efforts to maintain liquidity conditions conducive to stable interest rate transmission while managing short-term borrowing needs of banks.
The VRR auctions are key tools for the RBI to fine-tune overnight liquidity, ensuring banks have adequate but not excessive funds, thereby stabilizing overnight rates and supporting the overall functioning of monetary policy.
Important Points:
-
VRR auction notified for ₹1,000 billion; bids worth ₹1,452.53 billion received.
-
Partial allotment of 62.87% of bid volume made by RBI.
-
Cut-off rate fixed at 5.51%, close to the policy repo rate.
-
VRR instrument supports liquidity balance and interest rate transmission.
-
Strong demand indicates ongoing liquidity pressures and bank participation.
Sources: Reserve Bank of India official data, Economic Times, Business Standard, The Hindu Businessline.