As part of the latest round of liquidity infusion measures, the RBI will also be conducting USD/INR Buy/Sell Swap auction of USD 10 billion for a tenor of three years on February 4, 2026
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The Reserve Bank of India (RBI) on Friday announced that it will infuse durable liquidity aggregating about ₹2.15 lakh crore between January 30 and February 12 to bolster the banking system’s liquidity, currently just in marginal surplus, in the run-up to the financial year end when credit demand picks up.
This is the third time in the last one month or so that the central bank has announced liquidity infusion measures, comprising variable rate repo (VRR) auction, USD/INR Buy/Sell Swap auction and open market operation (OMO) purchase auctions of Government of India securities (G-Secs), of a durable nature.
One of the highlights of the latest round of liquidity infusion measures is that, the central bank, for the first time, will be conducting a variable rate repo (VRR) auction for 90 days. So far, the longest duration for which the RBI has conducted VRR is for 56 days.
The 90-day Variable Rate Repo (VRR) auction to inject ₹25,000 crore into the banking system will be conducted on January 30, 2026.
Madan Sabnavis, Chief Economist, Bank of Baroda, said: “When it’s a VRR, it’s less onerous for banks. So, when they are pledging G-Secs for 90 days, the securities are reckoned for LCR (liquidity coverage ratio) and SLR (statutory liquidity ratio) purposes. So that’s the advantage of VRR over OMO purchase of G-Secs
“At the same time, Banks are getting cash from RBI for a longer period. It gives certainty to them that they will get funds for 90 days.”
As part of the latest round of liquidity infusion measures, the RBI will also be conducting USD/INR Buy/Sell Swap auction of USD 10 billion for a tenor of three years on February 4, 2026. This will result in liquidity infusion of about ₹90,000 crore into the banking system.
In the first leg of the aforementioned swap transaction, banks will sell US Dollars to the RBI. The RBI will credit the Rupee funds to the current accounts of the successful bidders. In the reverse leg of the swap transaction, Rupee funds will be returned to RBI along with the swap premium to get the US Dollars back after three years.
RBI will also be conducting OMO purchase auctions of G-Secs for an aggregate amount of ₹1 lakh crore in two tranches of ₹50,000 crore each to be held on February 5, 2026, and February 12, 2026.
Published on January 23, 2026
