VRR Auctions: RBI Liquidity Infusion and CRR Cut Schedule
Why in the news
The Reserve Bank of India held a pair of VRR auctions to add liquidity to the banking system.
Key facts
- Surplus target: ₹1.5-2 lakh crore, to push repo rate cuts through to loan and deposit rates.
- CRR cut dates (2025): 6 Sept, 4 Oct, 1 Nov and 29 Nov, each 25 bps.
About VRR
- Short-term tool under the Liquidity Adjustment Facility (LAF).
- Auction at market-determined rates, unlike fixed-rate repo at the policy repo rate.
- Gives flexibility, competitive borrowing and fine-tuning of short-term mismatches.
Exam angle
- RBI tools: repo, reverse repo, VRR, VRRR, CRR, OMOs.
- VRR falls under LAF.