The Reserve Bank of India (RBI) has announced a seven-day Variable Rate Repo (VRR) auction worth ₹1 trillion scheduled for Monday. This move is aimed at addressing the evolving liquidity conditions within the banking system, which currently reports a surplus of ₹2.17 trillion as of Thursday. VRR auctions enable banks to borrow funds from the RBI against government securities at market-determined rates, thus assisting the central bank in managing short-term liquidity effectively. The RBI utilizes these variable rate repo and reverse repo operations to maintain overnight rates within the liquidity adjustment facility (LAF) corridor, which is defined by the standing deposit facility (SDF) rate at the lower end and the marginal standing facility (MSF) rate at the upper end. The weighted average call rate (WACR), which serves as the operating target of monetary policy, increased slightly to 5.24% from the previous 5.21%. The current policy repo rate, which is crucial for guiding monetary policy, stands at 5.25%.