Result of the Second Overnight Variable Rate Reverse Repo (VRRR) auction held on September 29, 2026
Distilled Policy Brief
- The Reserve Bank of India conducted an overnight Variable Rate Reverse Repo (VRRR) auction to absorb surplus liquidity from the banking system.
- Against a notified amount of ₹1,00,000 crore, total offers received and accepted stood at ₹33,770 crore at a cut-off and weighted average rate of 5.24 percent.
🎯 Prelims High-Yield Examination Points
In the overnight VRRR auction of September 2026, the RBI notified ₹1,00,000 crore, accepted ₹33,770 crore, and determined a cut-off and weighted average rate of 5.24%.
⚖️ Mains Analytical & Syllabus Linkages
VRRR auctions serve as a vital liquidity management tool for the central bank to mop up excess liquidity, manage short-term interest rates, and anchor monetary policy stances.
🎯 UPSC Prelims Practice Drill
With reference to the liquidity management operations of the Reserve Bank of India (RBI), consider the following statements regarding a Variable Rate Reverse Repo (VRRR) auction: 1. It is conducted to inject liquidity into the banking system. 2. In a VRRR auction, banks bid at different interest rates to park their surplus funds with the RBI. Which of the statements given above is/are correct?
- [A] 1 only
- [B] 2 only
- [C] Both 1 and 2
- [D] Neither 1 nor 2
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is incorrect because a Reverse Repo operation absorbs liquidity from the banking system, whereas repo operations inject liquidity. Statement 2 is correct as a Variable Rate Reverse Repo (VRRR) is used by the RBI to absorb surplus liquidity from the system where banks offer rates at which they are willing to park funds.
🏛️ 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.