← 9 November 2026's Current Affairs · Economy GS-3 Prelims ★★★☆☆ Mains ★★★★★
RBI holds 4-day Variable Rate Repo auction of ₹50,000 crore on 9 November
बातमीत का?
₹50,000 crore for four days: does a VRR repo inject or absorb liquidity? Know the LAF contrast
RBI notified a ₹50,000 crore, 4-day VRR auction for 9 November, reversing on 13 November, to manage liquidity.
Why it matters: GS-3 core
What you need to know
2 मिनिटे
The Reserve Bank of India notified a four-day Variable Rate Repo (VRR) auction under the Liquidity Adjustment Facility for Monday, 9 November 2026, with a notified amount of ₹50,000 crore and reversal on 13 November.
In a repo auction the RBI lends funds to banks against eligible collateral, so it injects short-term liquidity; the opposite operation, the Variable Rate Reverse Repo (VRRR), absorbs surplus liquidity.
The central bank said the auction followed a review of near-term liquidity conditions.
स्रोत: Topper IAS editorial (PIB / The Hindu / Indian Express)
महत्त्वाची तथ्ये
Remember these
- RBI notified a 4-day Variable Rate Repo (VRR) auction of ₹50,000 crore on Monday, 9 November 2026
- Reversal (repayment) date of the operation: 13 November 2026
- VRR is part of the Liquidity Adjustment Facility (LAF): the RBI lends to banks against eligible collateral, injecting short-term liquidity
- The opposite operation, Variable Rate Reverse Repo (VRRR), absorbs surplus liquidity from the banking system
- The auction followed an RBI review of near-term liquidity conditions
पूर्व · मुख्य
How the exam will ask it
पूर्व
- A repo operation under the LAF injects liquidity into the banking system, whereas a reverse repo absorbs it.
- In a Variable Rate Repo auction, the interest rate is discovered through bidding rather than being fixed by the RBI.
- Under LAF, banks borrow from the RBI against eligible government securities as collateral for a fixed tenor.
- The Variable Rate Reverse Repo (VRRR) is used by the RBI when the system has surplus liquidity.
मुख्य
GS Paper 3 (Monetary policy and Banking). Issue: tight or fluctuating system liquidity can disrupt short-term money market rates and the transmission of the policy repo rate. Provision: the RBI uses LAF tools such as fixed and variable rate repo and reverse repo auctions to fine-tune liquidity. Implication: durable liquidity needs a wider toolkit; way forward is clear communication, forecasting of liquidity and a mix of short-term and durable operations.
Quick recall
Answer before you reveal
With reference to the Variable Rate Repo (VRR) auction conducted by the Reserve Bank of India, consider the following statements:
- In a VRR auction the RBI lends funds to banks against eligible collateral for a fixed tenor.
- A VRR auction is used to absorb surplus liquidity from the banking system.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
उत्तर पहा
उत्तर: A — Correct: 1 only — Statement 1 is correct: a repo auction is a collateralised loan from the RBI to banks for a fixed tenor, which injects liquidity, while statement 2 is wrong. • 2 only — wrong: Statement 2 describes the reverse repo (VRRR), not a repo, so '2 only' cannot be right. • Both 1 and 2 — wrong: Both cannot hold because a repo injects liquidity whereas absorbing surplus liquidity is the reverse repo's role. • Neither 1 nor 2 — wrong: Statement 1 is true, so 'neither' is wrong.
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