The Reserve Bank of India (RBI) on Tuesday announced a Rs 50,000 crore two-day Variable Rate Repo (VRR) auction, a move aimed at managing short-term liquidity conditions ahead of the central bank’s monetary policy review.The auction will be conducted on June 3 between 9:30 am and 10 am, while the reversal of funds will take place on June 5.“On a review of current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Repo (VRR) auction on Wednesday, June 03, 2026,” the RBI said in a release.The announcement comes as surplus liquidity in the banking system has moderated in recent days. System liquidity stood at a surplus of about Rs 85,411.44 crore as of June 1, compared with a surplus of Rs 1.40 lakh crore on May 31.The central bank’s latest liquidity operation also reflected muted demand from banks.In the three-day VRR auction conducted on Tuesday, the RBI received bids worth Rs 17,445 crore against the notified amount of Rs 75,000 crore.The central bank accepted the entire amount and injected Rs 17,445 crore into the banking system at a cut-off and weighted average rate of 5.26 per cent, according to an RBI release.The latest liquidity operation comes as the Monetary Policy Committee (MPC) begins its three-day meeting on June 3, with the policy decision scheduled to be announced on June 5.
