MUMBAI: The Reserve Bank of India (RBI) has decided to conduct a set of operations to inject liquidity into the banking system after having a review of current liquidity and financial conditions.
The operations include a 90-day Variable Rate Repo (VRR) operation for an amount of Rs 25,000 crore, to be conducted on January 30, 2026, RBI said in a statement.
A USD/INR buy/sell swap auction of USD 10 billion for a tenor of 3 years is to be held on February 04, 2026.
Besides, open market operation (OMO) purchase auctions of Government of India securities for an aggregate amount of Rs 1,00,000 crore in two tranches of Rs 50,000 crore each to be held on February 08, 2026, and February 12, 2026.
Detailed instructions for each operation shall be issued separately by the RBI. Announcing these operations, the central bank said it will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions.
The Reserve Bank’s latest Liquidity infusion follows its December 23 announcement, under which around Rs 3 lakh crore was injected into the banking system through open market operations (OMOs) and a dollar-rupee buy/sell swap.
In December, the central bank announced bond purchases worth Rs 2 lakh crore via OMOs, conducted in four tranches of Rs 50,000 crore each, along with a three-year dollar-rupee buy/sell swap auction of $10 billion.
As part of that announcement, the RBI conducted an OMO purchase auction of Rs 50,000 crore on January 22.
“The durable liquidity measures were expected to ensure that system liquidity rises to the RBI’s target levels of 0.5% to 1% of net demand and time liabilities,” Gaura Sen Gupta, Chief Economist at IDFC First Bank, told Reuters.
“The VRR is transient liquidity provided to ensure that overnight rates remain contained,” she added, noting that she expects another Rs 1 trillion worth of bond purchases in March, which would take banking system liquidity to 0.5% of net deposits.
“The announcement was much needed, has come in line with expectations, and should lead to some reversal in yields,” a trader with a state-run bank said.
