RBI to discontinue daily VRR auctions from June 11 onwards due to evolving liquidity conditions

The Reserve Bank of India on Monday announced that it will be discontinuing the daily Variable Rate Repo auctions with effect from June 11, 2025, due to the current and evolving liquidity conditions.

"On a review of current and evolving liquidity conditions, it has been decided that the daily VRR auctions will be discontinued with effect from June 11, 2025, Wednesday," said the RBI in its statement.

Liquidity in the country's banking system stood at a surplus of Rs 2.45 trillion as of June 8, data from the Reserve Bank of India (RBI) showed.


The central bank had decided to undertake the auctions from January 16, 2025 to rebalance liquidity conditions in a non-disruptive manner to meet the needs of the productive sectors of the economy.

"With larger than anticipated collections under the goods and services tax (GST), system liquidity has tightened in this week. This is also reflected in the hardening of overnight money market rates, and in amounts under the fixed rate reverse repo of the liquidity adjustment facility (LAF)," said the statement.

In April, RBI governor Sanjay Malhotra had said the central bank would aim for a range near 1% of NDTL as a target for surplus liquidity in the system.