money · Economy / Liquidity / RBI / Money markets
RBI’s ₹2 lakh crore 29-day VRRR draws only ₹79,655 crore; overnight takes ₹1.61 lakh crore — another ₹1.5 lakh crore mop-up today
A day after the MPC’s 25 bp hike and shift to calibrated tightening, banks parked far less than RBI offered in the first big multi-day reverse-repo mop-up. The overnight window was fuller. Another drain — ₹1.5 lakh crore for 10 days — runs this morning.
60-sec
What RBI published on Thu 8 Oct 2026:
| Auction | Notified | Offers / accepted | Cut-off / WAR |
|---|---|---|---|
| 29-day VRRR | ₹2,00,000 cr | ₹79,655 cr | 5.49% / 5.49% |
| Overnight (1-day) VRRR | ₹2,00,000 cr | ₹1,60,664 cr | 5.49% / 5.49% |
Partial acceptance at cut-off: N.A. / NA on both results. Combined cash parked at RBI on Thursday ≈ ₹2.40 lakh crore (Capital Chronicle arithmetic: 79,655 + 1,60,664).
Today (Fri 9 Oct): RBI will run a 10-day VRRR for ₹1,50,000 crore, window 9:30–10:00 a.m. IST, reversal Mon 19 Oct.
Takeaway: the first multi-day drain after the hike was thinly bid; overnight was stronger. Another sizeable mop-up starts at the open. Not investment advice.
Analysis
Why the 29-day auction mattered
On Wednesday the Monetary Policy Committee raised the repo rate 25 bps to 5.50% and moved to calibrated tightening, saying it would use an appropriate mix of liquidity tools and aim to align the weighted average call rate with the repo (decision story). The ₹2 lakh crore 29-day reverse-repo was the first longer-tenor absorption after that turn (the 7 Oct drain was overnight) (Thursday set-up).
Banks offered — and RBI accepted — only ₹79,655 crore, about 40% of the notified amount (CC arithmetic). The cut-off and weighted-average rate both printed at 5.49%, one basis point under the new repo.
Overnight filled more of the pipe
The same day RBI also ran a second, overnight VRRR for another ₹2 lakh crore. Offers and acceptance were ₹1,60,664 crore — about 80% of that notified amount — again at 5.49%. That cash reverses today (Friday).
Together, the two operations still drained a large absolute sum even though the 29-day window undersubscribed. Equity tape on Thursday was already soft: Nifty closed 22,231.80 (−1.64%) with provisional FPI net sales of ₹12,943.58 crore (Morning Wire).
What to watch this morning
- Result of the ₹1.5 lakh crore 10-day VRRR after 10:00 a.m.
- Whether banks keep preferring short tenors over multi-day parks
- Call-money / WACR versus the 5.50% repo corridor
- September CPI on Mon 12 Oct
Not investment advice. No politics.
Sources
- Reserve Bank of India — Result of the 29-day VRRR auction held on October 08, 2026 (Press Release 2026-2027/1277) — https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=63755
- Reserve Bank of India — Result of the Overnight VRRR auction held on October 08, 2026 (Press Release 2026-2027/1280) — https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=63758
- Reserve Bank of India — RBI to conduct 10-day VRRR auction under LAF on October 09, 2026 (Press Release 2026-2027/1288) — https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=63766
- Reserve Bank of India — Notice of Overnight VRRR on October 08, 2026 — https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=63756
- Capital Chronicle: RBI MPC hikes repo 25 bps to 5.50%
- Capital Chronicle: Nifty sinks 1.64% as FPIs sell ₹12,944 crore
Business. Markets. Money. Free.
Corrections: corrections@capitalchronicle.news
India markets & business. Free.
Not personalized financial advice. Corrections: corrections@capitalchronicle.news