RBI Injects ₹48,014 Crore Via Seven-Day VRR Auction Amid Liquidity Tightening
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Last Updated: 18th March 2026 - 05:55 pm
Summary:
The Reserve Bank of India has injected ₹48,014 crores into the banking system. This was done through a seven-day Variable Rate Reverse Repo auction, with the rate fixed at 5.26%. This was necessary because the payment of advance tax caused a sharp drop in surplus liquidity.
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The Reserve Bank of India put ₹48,014 crore into the banking system on March 18, 2026, through a 7-day variable rate repo (VRR) auction.
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The funds were injected at a cut-off rate and weighted average rate of 5.26% as per the data provided by the Reserve Bank of India. The amount injected was lower than the notified ₹1.50 lakh crore for the auction.
Under the VRR system, the banks bid for money at variable interest rates over a short period of time, which helps the central bank regulate the liquidity conditions in the system.
Liquidity Conditions In The Banking System
Liquidity in the banking system declined sharply following advance tax payments. According to RBI data, system liquidity stood at a surplus of ₹75,483.63 crore as of March 16, compared with a surplus of ₹2.08 lakh crore as of March 15.
Further tightening is expected due to outflows related to Goods and Services Tax (GST) payments scheduled later in the week.
RBI’s Recent Liquidity Measures
Since January 2026, RBI has provided durable liquidity to the tune of ₹3.50 lakh crore through open market operations, wherein government securities are being purchased.
The Reserve Bank of India has also been using various tools to manage liquidity, such as Variable Rate Reverse Repo auctions as well as Open Market Operations.
Impact On Short-Term Rates
The liquidity management actions have impacted the short-term rates in the money markets. In the recent past, the overnight rates have been lower than the repo rate.
The RBI’s latest auction adds to ongoing efforts to manage liquidity fluctuations arising from tax-related outflows and maintain stability in the banking system.
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