The Reserve Bank of India infused ₹81,590 crore into the banking system through a 3-day Variable Rate Repo auction to manage short-term liquidity and maintain financial market stability.

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• Reserve Bank of India injected ₹81,590 crore transient liquidity into the banking system through a 3-day Variable Rate Repo auction.
• The liquidity infusion was conducted to address temporary cash flow fluctuations and maintain smooth functioning of India’s financial and banking system.
• RBI infused funds at a cut-off interest rate of 5.26% under the Variable Rate Repo auction mechanism.
• Variable Rate Repo auctions are short-term monetary policy tools used by the RBI to provide liquidity support to banks whenever market liquidity tightens.
• Transient liquidity refers to temporary shortages or fluctuations in banking system cash availability caused by taxation, government transactions, or market movements.
• Through VRR auctions, banks borrow funds from the RBI by pledging government securities for a fixed short-term period.
• The liquidity operation helps stabilise overnight interest rates and ensures adequate fund availability within the banking sector.
• RBI frequently uses repo operations, reverse repo measures, and liquidity adjustment facilities to manage inflation, liquidity conditions, and monetary stability.