Amid changing near-term liquidity conditions, the Reserve Bank of India will conduct a 7-day Variable Rate Repo (VRR) auction on 19 October 2026. The ₹1 lakh crore auction, conducted under the Liquidity Adjustment Facility (LAF), will be open from 9:30 AM to 10:00 AM, with reversal scheduled for 26 October 2026.
Highlights
- The RBI will conduct a 7-day VRR auction worth ₹100,000 crore on 19 October 2026, from 9:30 AM to 10:00 AM.
- The reversal of funds under this VRR auction is scheduled for Monday, 26 October 2026.
- The auction is part of the RBI's short-term liquidity management, allowing liquidity in the banking system to be adjusted as required.
This article was translated from the original. Read the original version by our correspondent here.
Auction plan for liquidity management
As stated in the press release by the Reserve Bank of India, the central bank decided to conduct this auction after reviewing prevailing and evolving near-term liquidity conditions. The notified amount is ₹100,000 crore, and the auction tenor is set at 7 days.The auction window is scheduled from 9:30 AM to 10:00 AM on 19 October 2026. Under this operation, funds will be reversed on Monday, 26 October 2026.
Impact on the market and banking system
This move is part of the RBI's short-term liquidity management framework, through which the availability of funds in the banking system is adjusted as needed. VRR auctions are generally used during periods when the central bank needs to provide short-term liquidity support to the system.The operational guidelines for the auction remain the same as those in the Reserve Bank press release 2021-2022/1572 dated 20 January 2022. The current announcement has been issued as press release number 2026-2027/1345.
Our previous report on the RBI discussed upward revisions to FY27 growth and inflation forecasts under its latest monetary policy, an increase in the repo rate to 5.5%, and a shift to a ‘calibrated tightening’ stance. It also noted that amid inflationary pressures, the central bank had indicated several measures, including OMO sales, to absorb excess liquidity and keep market conditions stable.
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