Result of the Overnight Variable Rate Reverse Repo (VRRR) auction held on September 22, 2026
Distilled Policy Brief
- The Reserve Bank of India conducted an overnight Variable Rate Reverse Repo (VRRR) auction to absorb excess liquidity from the banking system.
- Against a notified amount of ₹75,000 crore, total offers received and accepted stood at ₹71,971 crore at a cut-off and weighted average rate of 5.24 percent.
🎯 Prelims High-Yield Examination Points
Variable Rate Reverse Repo (VRRR) auctions are a liquidity management tool used by the RBI to absorb surplus liquidity from the banking system by offering interest rates determined through market auctions.
⚖️ Mains Analytical & Syllabus Linkages
Understanding RBI's liquidity management operations helps analyze monetary policy transmission, management of short-term interest rates, and control of inflationary pressures in the economy.
🎯 UPSC Prelims Practice Drill
With reference to the Liquidity Adjustment Facility (LAF) operations of the Reserve Bank of India (RBI), consider the following statements regarding Variable Rate Reverse Repo (VRRR) auctions: 1. VRRR auctions are conducted by the RBI to inject durable liquidity into the banking system. 2. In a VRRR auction, the total value of offers submitted by banks can be lower than the notified amount. 3. The cut-off rate in a VRRR auction represents the yield at which the RBI accepts excess funds from commercial banks. Which of the statements given above are correct?
- [A] 1 and 2 only
- [B] 2 and 3 only
- [C] 1 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is incorrect because Variable Rate Reverse Repo (VRRR) auctions are conducted by the RBI to absorb excess liquidity from the banking system, not to inject liquidity. Statement 2 is correct as seen in the RBI auction data where total offers received (₹71,971 crore) were lower than the notified amount (₹75,000 crore). Statement 3 is correct because the cut-off rate is the interest rate at which the RBI accepts funds from participating banks in the auction.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.