RBI’s 11-day VRR sees soft demand; cut-off fixed at 5.26%

In the short-tenor 11-day VRR, RBI offered up to ₹750 billion but banks tendered just ₹249.69 billion, all of which was allotted. The uniform cut-off rate of 5.26%—which also emerged as the weighted average—came in close to the prevailing policy corridor, indicating that banks are not desperate for additional short-term funds.

Key highlights

Bids received: ₹249.69 billion versus notified ₹750 billion, reflecting subdued demand for liquidity.

Allotment: Entire bid amount of ₹249.69 billion accepted by RBI.

Pricing: Cut-off and weighted average rate both set at 5.26% for the 11-day tenor.

Liquidity signal: Outcome suggests banks are relatively comfortable on cash, relying less on the VRR window despite year-end pressures.

The auction result reinforces the view that systemic liquidity, while more balanced than earlier, remains adequate, allowing RBI to fine‑tune short-term rates without aggressive injections.

Sources: Reserve Bank of India auction notification and post‑auction press release.