RBI will conduct an overnight VRR auction of ₹1.25 lakh crore on June 22.
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Highlights
- RBI will conduct an overnight VRR auction of ₹1.25 lakh crore on June 22, 2026, from 9:30 AM to 10:00 AM.
- The notified amount of the auction is ₹1,25,000 crore and its reversal will be on June 23, 2026, with the guidelines remaining the same.
- This auction is expected to meet the short-term liquidity needs of the banking system and keep money market rates stable within the policy range.
This article was translated from the original. Read the original version by our correspondent here.
Amid the current and evolving liquidity conditions, the Reserve Bank of India has decided to conduct an overnight Variable Rate Repo auction under the Liquidity Adjustment Facility on June 22, 2026. This auction will be for ₹1.25 lakh crore and its reversal is scheduled for June 23, 2026.
Size and Schedule of the Auction
RBI press release states that this overnight VRR auction will be held on Monday, June 22, 2026, from 9:30 AM to 10:00 AM. The notified amount is ₹1,25,000 crore and its tenure will be one day.The central bank has stated that the reversal of this operation will be on Tuesday, June 23, 2026. The operational guidelines for the auction will remain the same as those in the Reserve Bank press release 2021-2022/1572 dated January 20, 2022.
Potential Impact on the Banking System
This step is part of RBI's short-term liquidity management framework, through which the availability of funds in the banking system is adjusted according to current needs. The overnight VRR auction is generally used when the central bank needs to provide liquidity support to the system for a very short period.The size of ₹1.25 lakh crore indicates that RBI is closely monitoring near-term funding conditions. This may help keep money market rates stable within the policy framework and manage banks' short-term cash needs.
Our previous report discussed the recent decline in USD/INR and the technical indicators behind it, where the pair remained below MA-20 and MA-50 but stayed above MA-200. That analysis indicated the possibility of a near-term rebound due to the oversold oscillator, and considered the range of ₹93.86–₹94.88 and the resistance at ₹94.88 as important levels.
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