The Reserve Bank of India’s latest 5-day Variable Rate Repo (VRR) auction attracted bids worth ₹257.95 billion against a notified amount of ₹1 trillion. The central bank allotted the same amount at a weighted average and cut-off rate of 5.26 percent, reflecting muted liquidity appetite among banks.
India’s central bank conducted a 5-day Variable Rate Repo (VRR) auction on January 2, 2026, with results highlighting subdued participation from banks. Against a notified amount of ₹1 trillion, bids received totaled only ₹257.95 billion, underscoring limited short-term liquidity demand in the system.
The Reserve Bank of India (RBI) allotted the entire bid amount of ₹257.95 billion at a weighted average rate of 5.26 percent, which also stood as the cut-off rate. Analysts note that the tepid response indicates comfortable liquidity conditions among banks, reducing the need for borrowing under the VRR window.
Key Highlights
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RBI notified ₹1 trillion for the 5-day VRR auction.
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Bids received amounted to ₹257.95 billion, reflecting low demand.
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The full bid amount was allotted at 5.26 percent.
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Weighted average and cut-off rates were both set at 5.26 percent.
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Muted participation signals adequate liquidity in the banking system.
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The auction outcome suggests banks are relying less on short-term repo borrowing.
The results reaffirm the RBI’s calibrated liquidity management approach, balancing systemic stability with market needs. While demand was modest, the auction underscores the central bank’s readiness to provide liquidity support when required.
Sources: Reuters, Reserve Bank of India