RBI to conduct Rs 1 lakh cr three-day VRR auction on May 22

However, it received a muted response from the participants despite the narrowing of surplus systemic liquidity.The overnight VRR auction which happened earlier on Thursday received bids worth Rs 25,360 crore, for a notified amount of Rs 1.25 lakh crore.

The Reserve Bank of India (RBI) on Thursday said that it will conduct a three-day variable rate repo (VRR) auction for a notified amount of Rs 1 lakh crore on May 22.

The auction will take place between 9:30 AM and 10 AM, and the reversal of these funds will take place on May 25, RBI said in a release.

''On a review of current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Repo (VRR) auction on Friday, May 22, 2026,'' RBI said.

Liquidity surplus in the banking system has narrowed in the last few days, especially after the goods and services tax outflows. This has led to an uptick in the overnight money market rates.

Currently, the liquidity in the banking system is estimated to be in surplus of around Rs 1.29 lakh crore as on May 20, which is sharply lower than Rs 2.58 lakh crore as on April 30, according to the RBI data.

In order to provide liquidity to the banking system and arrest rising overnight money market instrument rates, the central bank has conducted five VRR auctions in the month of May so far, and one on April 30. However, it received a muted response from the participants despite the narrowing of surplus systemic liquidity.

The overnight VRR auction which happened earlier on Thursday received bids worth Rs 25,360 crore, for a notified amount of Rs 1.25 lakh crore. The central bank accepted the entire amount at a cut-off rate of 5.26 per cent.