RBI pulls ₹3.93 trillion from banks in latest reverse repo auction

The Reserve Bank of India announced that its latest variable-rate reverse repo auction absorbed ₹3,93,352 crore, with all submitted bids accepted at a cut-off and weighted average rate of 5.24%. This operation follows a series of VRRR auctions intended to drain surplus liquidity and bring overnight money-market rates in line with the repo rate. On September 11, the surplus liquidity in the banking system was estimated at roughly ₹10.73 trillion, driven by large inflows of foreign-currency deposits and month-end government outlays.

In addition to the reverse repo measures, the RBI scheduled open-market sales of government securities worth ₹1 trillion, to be auctioned in three tranches on September 17, 21 and 28. The first tranche will involve ₹50,000 crore, with two subsequent ₹25,000-crore tranches. These steps aim to stabilize short-term funding conditions and manage the excess cash in the system.