RBI to hold ₹1.5 lakh crore 6-day VRRR auction on Friday

RBI Announces Massive Reverse Repo Auction

Get ready for a financial whirlwind! The Reserve Bank of India (RBI) is set to conduct a colossal ₹1.5 lakh crore variable rate reverse repo (VRRR) auction this Friday, August 29th, 2025. This six-day auction is a significant move by the RBI to manage the nation's liquidity.

In a statement released earlier today, the RBI cited "a review of the current and evolving liquidity conditions" as the reason behind this massive undertaking. The central bank regularly employs VRRR operations to effectively manage the flow of money in the banking system and maintain stability.

The need for this substantial auction is underscored by the current surplus liquidity. As of Wednesday, the banking system boasted a net liquidity surplus of ₹1.83 lakh crore, according to the RBI's latest figures. This highlights the significant amount of excess funds circulating within the financial system.

Interestingly, earlier today's one-day VRRR auction saw a slightly lower than expected response. The RBI accepted bids totaling ₹49,515 crore, against a notified amount of ₹75,000 crore. This suggests a potential need for even more robust measures to control liquidity in the longer term.

• Key takeaways:
• Massive scale: ₹1.5 lakh crore VRRR auction planned.
• Duration: Six-day auction.
• Purpose: Absorb excess liquidity, maintain short-term rate stability.
• Context: Current surplus liquidity of ₹1.83 lakh crore.

This major financial event promises to have significant ripple effects across India's economy. Keep an eye on this space for further updates.