RBI VRR auction oversubscribed; cut-off at 5.55%

The RBI's 4-day Variable Rate Repo auction on October 26, 2026, received bids of ₹1,86,666 crore against a notified amount of ₹1,50,000 crore, with full allotment at a cut-off rate of 5.55%. The weighted average rate of 5.59% suggests market liquidity conditions are tight, with banks willing to pay a premium for short-term funds. This indicates ongoing liquidity deficit in the Indian banking system, which may influence near-term monetary policy expectations.

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