The Reserve Bank of India will conduct an overnight VRRR auction for ₹50,000 crore on July 31.
This follows a 3‑day VRRR on July 29 that mopped up ₹46,058 crore in excess liquidity.
RBI is using this Variable Rate Reverse Repo tool to manage surplus funds in the banki
ng system.
Overnight WACR (call money rate) rose to 5.38%, nearing the policy repo rate of 5.50%.
Liquidity surplus remains elevated, despite RBI’s efforts.
Banks previously parked ₹2 trillion via VRRR auctions, but appetite has reduced recently.
High GST outflows (~₹1.2 trillion) added upward pressure on overnight rates.
Analysts say RBI's calibrated operations aim to align short-term rates close
r to policy.
Monetary tightening may be needed if liquidity stays elevated.