RBI VRRR auction sees weak demand, cut-off at 5.24%

The RBI's 26-day VRRR auction on September 11, 2026, received offers of ₹60,449 crore against a notified amount of ₹5,00,000 crore, with full acceptance at a cut-off rate of 5.24%. The low bid-to-cover ratio indicates surplus liquidity in the banking system is lower than the RBI's intended absorption, suggesting a liquidity deficit or reduced appetite for parking funds at the current rate. This may signal that the RBI's liquidity management is becoming less effective, potentially influencing short-term money market rates.