Reserve Bank of India to Conduct Rs 2 Lakh Crore 7-Day Variable Rate Repo Repo Operation on April 17

Reserve Bank of India to Conduct Rs 2 Lakh Crore Variable Rate Reverse Repo Auction

The Reserve Bank of India (RBI) will conduct a Rs 2 lakh crore seven-day variable rate reverse repo (VRRR) auction on April 17, 2026, as announced in a recent release. This move comes in response to the surplus transient liquidity conditions prevailing in the banking system.

The auction will take place between 9:30 am and 10:00 am on April 17, with the reversal of these funds scheduled to occur on April 24, as per the RBI's notification. Typically, there is an outflow of funds on the 20th of every month due to Goods and Services Tax (GST) payments, which puts pressure on systemic liquidity and money market rates. By reversing seven-day VRRR funds after GST outflows, the RBI aims to maintain system liquidity and keep overnight rates under control.

As of April 15, the liquidity in the banking system is estimated to be in surplus of around Rs 5.22 lakh crore. This significant surplus is a result of the RBI's proactive liquidity management. In fact, the central bank had conducted a seven-day VRRR auction on April 10 and pulled out Rs 2,00,041 crore of transient liquidity from the banking system, which is set to mature on April 17.

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The RBI Governor, Sanjay Malhotra, emphasized the central bank's commitment to proactive and pre-emptive liquidity management during the April monetary policy. Going forward, the RBI will continue to ensure sufficient liquidity in the banking system to meet the productive requirements of the economy.