RBI absorbs ₹71,971 crore liquidity from banks
The Reserve Bank of India (RBI) absorbed ₹71,971 crore liquidity from the banking system through an overnight Variable Reverse Repo Rate (VRRR) auction. This action, which saw 96% of the ₹75,000 crore offered amount accepted at a 5.24% rate, is part of the RBI's strategy to manage excess liquidity, prevent inflation, and align the overnight call money rate with the repo rate ahead of potential rate hikes.
Why it matters
The RBI's liquidity management operations are crucial for controlling inflation, stabilizing the financial system, and influencing interest rates, directly impacting the Indian economy and financial markets.
Reserve Bank of India (RBI) has absorbed ₹71,971 crore liquidity from the banking system through overnight Variable Reverse Repo Rate (VRRR) auction, according to a notification released on Tuesday (September 22, 2026).
VRRR is the rate at which banks park their funds with the RBI. It is a tool that central banks use to suck liquidity.
The VRRR auction was held for ₹75,000 crore and offers were recieved for 96% of the amount for a rate of 5.24%. The overnight facility had a tenor of one day.
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