Document title: Result of the Second Overnight Variable Rate Reverse Repo (VRRR) Auction – August 20, 2026
Issuing authority: Reserve Bank of India (RBI)
Reference number: Press Release 2026-2027/931
Date: August 20, 2026
Policy rates and liquidity
The RBI announced the outcome of its second overnight Variable Rate Reverse Repo (VRRR) auction held on 20 August 2026. The notified amount for the auction was ₹50,000 crore. Participants submitted offers totaling ₹53,938 crore, of which ₹50,013 crore were accepted, resulting in a partial acceptance of 92.7% at the cut‑off rate. Both the cut‑off rate and the weighted average rate were 5.24%, reflecting the cost of liquidity for banks in the overnight market.
Banking and credit
The auction results indicate robust participation from banks seeking to park excess liquidity. The high acceptance percentage (92.7%) demonstrates that the majority of the offers were accommodated at the prevailing rate, thereby providing a significant amount of short‑term liquidity to the banking system.
Regulatory and policy measures
Through the VRRR mechanism, the RBI continues to manage liquidity conditions and influence short‑term interest rates. This second auction underscores the central bank’s ongoing use of reverse repo operations as a monetary policy tool to fine‑tune liquidity and maintain stability in the money market. The press release was issued by Deputy General Manager Ajit Prasad, Communications, RBI.
In conclusion, the RBI’s VRRR auction on 20 August 2026 successfully absorbed ₹50,013 crore at a 5.24% rate, reinforcing the effectiveness of the reverse repo facility in managing overnight liquidity and guiding short‑term market rates.