The Reserve Bank of India on 18 May 2026 injected ₹1.2 trillion into the banking system through a seven-day variable-rate repo auction, accepting all 86 bids at a cut-off rate of 6.48 percent according to rbi.org.in.
The central bank received bids totalling ₹2.1 trillion, with the lowest accepted rate at 6.42 percent and the highest at 6.54 percent. Scheduled commercial banks, primary dealers and select financial institutions participated in the electronic auction that opened at 10:30 IST and closed at 11:30 IST. The funds will mature on 25 May 2026, returning to the RBI with accrued interest.
The infusion comes as banking-system liquidity turned into a ₹1.3 trillion deficit last week, driven by advance-tax outflows and the festive-season surge in currency demand. The 6.48 percent cut-off sits 12 basis points above the policy repo rate, reflecting tight overnight money-market conditions where the weighted-average call rate had touched 6.65 percent on 17 May. Comparable seven-day VRR auctions in April cleared at 6.31-6.34 percent, indicating a 14-17 basis-point hardening in short-term funding costs over the past month.
Market participants will watch the RBI’s next durable-liquidity step: a ₹40,000 crore 14-day variable-rate repo is scheduled for 20 May, followed by the May 23 variable-rate reverse-repo auction that could drain excess cash if the current deficit reverses. Traders also expect the central bank to announce a special three-year long-term repo operation before the June monetary-policy review to address structural tightness in system liquidity.