The Reserve Bank of India’s (RBI) 90-day Variable Rate Repo (VRR) auction drew bids worth ₹950.62 billion against a notified ₹250 billion. RBI allotted ₹250.04 billion, with a partial allotment of 38.37% at a cut-off rate of 5.34%. The weighted average rate stood at 5.40%.
The Reserve Bank of India (RBI) conducted its 90-day Variable Rate Repo (VRR) auction, which witnessed overwhelming demand from market participants. Against a notified amount of ₹250 billion, the auction received bids totaling ₹950.62 billion, underscoring strong liquidity appetite in the banking system.
RBI allotted ₹250.04 billion, resulting in a partial allotment of 38.37% at the cut-off rate of 5.34%. The weighted average rate across successful bids was 5.40%, reflecting competitive bidding conditions.
Analysts note that the auction outcome highlights banks’ preference for short-term liquidity support amid evolving interest rate dynamics. The VRR mechanism continues to serve as a vital tool for liquidity management, balancing systemic needs with monetary policy objectives.
Key Highlights:
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Total Bids: ₹950.62 billion vs notified ₹250 billion.
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Allotment: ₹250.04 billion, partial allotment at 38.37%.
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Cut-Off Rate: 5.34%.
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Weighted Average Rate: 5.40%.
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Market Context: Strong demand reflects liquidity pressures and short-term funding requirements.
The auction underscores RBI’s proactive role in managing liquidity while maintaining monetary stability.
Sources: Reuters, Economic Times, Business Standard