← 20 October 2026's Current Affairs · Economy GA Prelims ★★★★☆ Mains ★★★☆☆
RBI uses Variable Rate Repo auctions to manage liquidity
ಸುದ್ದಿಯಲ್ಲಿ ಏಕೆ?
Banks bid ₹1.5 lakh crore for ₹1 lakh crore: how RBI's Variable Rate Repo works
RBI schedules an overnight VRR auction for 21 October as it manages near-term liquidity under the LAF.
Why it matters: factual, Prelims-type
What you need to know
2 ನಿಮಿಷ
The Reserve Bank of India will conduct an overnight Variable Rate Repo (VRR) auction under the Liquidity Adjustment Facility on 21 October 2026, after reviewing near-term liquidity conditions.
A 7-day VRR auction on 19 October drew bids of ₹1,50,735 crore against a notified amount of ₹1,00,000 crore, and ₹1,00,014 crore was allotted.
In such auctions the cut-off rate is discovered from the bids rather than fixed in advance.
ಮೂಲಗಳು: Topper IAS editorial (PIB / The Hindu / Indian Express)
ಮುಖ್ಯ ಅಂಶಗಳು
Remember these
- RBI will hold an overnight Variable Rate Repo (VRR) auction under the LAF on 21 October 2026.
- The 7-day VRR auction on 19 October drew bids of ₹1,50,735 crore against a notified ₹1,00,000 crore.
- Of the bids, ₹1,00,014 crore was allotted.
- In a VRR auction the cut-off rate is discovered from bids, unlike a Fixed Rate Repo at the policy repo rate.
- LAF is RBI's main tool for managing day-to-day liquidity in the banking system.
ಪ್ರಿಲಿಮ್ಸ್ · ಮೇನ್ಸ್
How the exam will ask it
ಪ್ರಿಲಿಮ್ಸ್
- Under the Liquidity Adjustment Facility, the RBI injects liquidity through repo operations and absorbs it through reverse repo operations.
- In a Variable Rate Repo auction, the rate is determined through competitive bidding by banks rather than being fixed in advance.
- A Fixed Rate Repo is conducted at the policy repo rate, whereas a VRR can have a cut-off rate above or below it.
- The Cash Reserve Ratio is a reserve requirement and does not determine the rate in liquidity auctions.
ಮೇನ್ಸ್
GS-III (Monetary policy; banking): Surplus or deficit system liquidity can blunt the transmission of the repo rate to market rates. RBI uses LAF instruments such as VRR auctions of varying tenors to fine-tune liquidity, with price discovery through bids. The way forward is transparent, predictable liquidity management so that short-term rates stay aligned with the policy stance.
Quick recall
Answer before you reveal
ಭಾರತೀಯ ರಿಸರ್ವ್ ಬ್ಯಾಂಕ್ ತನ್ನ ದ್ರವ್ಯತೆ ನಿರ್ವಹಣಾ ಚೌಕಟ್ಟಿನಡಿ ನಡೆಸುವ ವೇರಿಯಬಲ್ ರೇಟ್ ರೆಪೋ (VRR) ಹರಾಜಿನಲ್ಲಿ, ಬ್ಯಾಂಕುಗಳು ಹಣ ಪಡೆಯುವ ದರವು:
- ಸ್ಪರ್ಧಾತ್ಮಕ ಬಿಡ್ಡಿಂಗ್ ಮೂಲಕ ನಿರ್ಧಾರವಾಗುತ್ತದೆ; ಹರಾಜಿನಿಂದ ಕಟ್-ಆಫ್ ದರ ಹೊರಹೊಮ್ಮುತ್ತದೆ
- ಪ್ರತಿ ಬಿಡ್ಡುದಾರರಿಗೂ ನೀತಿ ರೆಪೋ ದರದಲ್ಲಿ ಮುಂಚಿತವಾಗಿ ನಿಗದಿಯಾಗಿರುತ್ತದೆ
- ಪ್ರತಿ ಹರಾಜಿಗೂ ಹಣಕಾಸು ಸಚಿವಾಲಯವು ಪ್ರತ್ಯೇಕವಾಗಿ ನಿಗದಿಪಡಿಸುತ್ತದೆ
- ಚಾಲ್ತಿಯಲ್ಲಿರುವ ನಗದು ಮೀಸಲು ಅನುಪಾತಕ್ಕೆ ಸ್ವಯಂಚಾಲಿತವಾಗಿ ಜೋಡಣೆಯಾಗಿರುತ್ತದೆ
ಉತ್ತರ ನೋಡಿ
ಉತ್ತರ: A — ಸರಿಯಾದ ಉತ್ತರ: ಸ್ಪರ್ಧಾತ್ಮಕ ಬಿಡ್ಡಿಂಗ್ ಮೂಲಕ ನಿರ್ಧಾರವಾಗುತ್ತದೆ; ಹರಾಜಿನಿಂದ ಕಟ್-ಆಫ್ ದರ ಹೊರಹೊಮ್ಮುತ್ತದೆ. ಸ್ಥಿರ ದರ ರೆಪೋ ಮಾತ್ರ ನೀತಿ ರೆಪೋ ದರದಲ್ಲಿ ನಡೆಯುತ್ತದೆ.
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