The Reserve Bank of India (RBI) will conduct a two-day Variable Rate Repo (VRR) auction under the Liquidity Adjustment Facility (LAF) on December 30, 2025, for Rs 2 trillion. The short-term liquidity measure aims to manage cash flow in the banking system amid year-end funding requirements.
The Reserve Bank of India (RBI) announced it will conduct a two-day Variable Rate Repo (VRR) auction worth Rs 2 trillion on December 30, 2025, under the Liquidity Adjustment Facility (LAF). This move is part of the central bank’s ongoing liquidity management operations aimed at ensuring smooth financial market functioning.
The auction will allow eligible banks to borrow funds from the RBI at market-determined rates, helping manage short-term liquidity pressures that often surface during the financial year-end period. Such repo operations are commonly used to ease temporary liquidity mismatches in the banking system.
Key Highlights
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Auction Amount: Rs 2 trillion
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Tenor: 2 days, under the Liquidity Adjustment Facility (LAF)
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Auction Date: December 30, 2025
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Purpose: To provide short-term liquidity support to banks during year-end cash demand
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Mechanism: Variable rate, allocated through a multiple-price auction process
This short-term liquidity infusion reinforces RBI’s proactive approach in maintaining adequate liquidity conditions while ensuring stability in money markets.
Source: Reserve Bank of India, Reuters