The Reserve Bank of India will conduct an overnight Variable Rate Reverse Repo (VRRR) auction on October 13, 2026, after reviewing current and evolving liquidity conditions. The operation, worth ₹1.5 lakh crore, will be conducted under the Liquidity Adjustment Facility (LAF) and reversed on October 14, 2026.
Highlights
- RBI will conduct an overnight VRRR auction worth ₹150,000 crore on October 13, 2026, to absorb short-term liquidity.
- The auction will be held on October 13 between 9:30 a.m. and 10:00 a.m., and the funds will be reversed on October 14, 2026.
- The auction will be conducted in accordance with the operational guidelines in Press Release 2019-2020/1947 dated February 13, 2020, ensuring continuity in the existing liquidity management framework.
This article was translated from the original. Read the original version by our correspondent here.
Auction schedule for liquidity management
According to the Reserve Bank of India, the auction will be held on Tuesday, October 13, 2026, from 9:30 a.m. to 10:00 a.m. The notified amount will be ₹150,000 crore, with a tenor of one day.The central bank said the decision was taken after reviewing prevailing and evolving liquidity conditions. Funds under this overnight operation will be reversed on Wednesday, October 14, 2026.
Operational rules and broader significance
The auction's operational guidelines will remain in line with RBI Press Release 2019-2020/1947 dated February 13, 2020. This indicates that the central bank is maintaining continuity in the existing operational framework for liquidity management.VRRR auctions are used to absorb short-term excess liquidity from the banking system. Such a move under the LAF generally reflects the central bank's active role in managing money market conditions and short-term rates.
Our previous report on the RBI Monetary Policy Committee's (MPC) October policy decision discussed a potential change in the repo rate due to factors such as rising retail inflation, Brent crude above $100 per barrel, and pressure on the rupee. It also noted that markets would watch not only the central bank's decision but also signals of further policy tightening.
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