The RBI books a three-day reverse repo to run over the weekend

Victoria Shinder24 September 2026, 20:301 min read

The Reserve Bank of India will conduct a three-day Variable Rate Reverse Repo auction under the Liquidity Adjustment Facility on Friday 25 September 2026, it said in a press release. The decision follows a review of current and evolving liquidity conditions. The operational guidelines remain those set out in the Bank's press release 2019-2020/1947 of 13 February 2020.

What it means

The tenor is the message. A three-day operation announced on a Thursday for a Friday covers the weekend, which means the Bank expects surplus cash to sit in the system through non-working days rather than drain out on its own.

Reverse repos absorb liquidity: banks lend to the central bank rather than into the market, and the variable rate form lets the price be discovered rather than dictated. Reading a run of these is the cheapest way to see how far the operating rate is drifting from the policy rate, which is the thing a liquidity framework exists to prevent.