Economy · GS3.1 · 2026-10-23 · 3 min read · 2026-10-23-am
RBI's Treasury Bills and Variable Rate Repo Auctions on October 21-22, 2026
The Reserve Bank of India conducted auctions for 91-day, 182-day, and 364-day Treasury Bills on October 21, 2026, and an Overnight Variable Rate Repo auction on October 22, 2026. These auctions are key monetary policy tools that influence liquidity and short-term interest rates, important for both Prelims and Mains preparation.
RBI's Treasury Bills and Variable Rate Repo auctions manage short-term liquidity and signal monetary policy stance.
Why is this in the news?
RBI announced the results of Treasury Bills auctions on October 21, 2026, and the Overnight Variable Rate Repo auction on October 22, 2026.
What happened in the Treasury Bills auctions?
- Auction details. RBI notified ₹8,000 crore for 91-day and 182-day T-Bills each, and ₹7,000 crore for 364-day T-Bills on October 21, 2026.
- Bids received but no acceptance. Despite receiving competitive bids exceeding notified amounts (₹15,366.6 crore for 91-day, ₹18,925.5 crore for 182-day, ₹11,352.5 crore for 364-day), RBI did not accept any bids, resulting in zero allotment.
- Non-competitive bids. Non-competitive bids were also received (₹12,028.759 crore for 91-day, ₹1,712.416 crore for 182-day, ₹1,683.571 crore for 364-day) but none were accepted.
What were the results of the Overnight Variable Rate Repo auction?
- Auction size and bids. On October 22, 2026, RBI notified ₹50,000 crore for the 1-day VRR auction and received bids totaling ₹1,62,354 crore.
- Amount allotted and rates. RBI allotted ₹50,006 crore at a cut-off rate of 5.54% and a weighted average rate of 5.55%, with a partial allotment percentage of 3.2% at the cut-off rate.
Why do these auctions matter for monetary policy?
- Liquidity management. Treasury Bills and Variable Rate Repo auctions are tools RBI uses to manage short-term liquidity in the banking system.
- Interest rate signaling. The cut-off and weighted average rates from these auctions influence short-term interest rates and reflect RBI's monetary policy stance.
- Fiscal-monetary interface. These auctions also affect government borrowing costs and overall fiscal management.
Key numbers
| Figure | What it measures | Source |
|---|---|---|
| ₹8,000 crore | Notified amount for 91-day and 182-day Treasury Bills | |
| ₹7,000 crore | Notified amount for 364-day Treasury Bills | |
| ₹50,000 crore | Notified amount for the 1-day Variable Rate Repo auction | |
| 5.54% | Cut-off rate for the Overnight Variable Rate Repo auction |
Back to basics: Monetary Policy Instruments
Monetary policy uses instruments like Treasury Bills and Variable Rate Repo auctions to regulate liquidity and control interest rates. Treasury Bills are short-term government securities issued to meet fiscal needs, while Variable Rate Repo auctions allow RBI to borrow money from banks at variable interest rates, influencing overnight liquidity and short-term rates.
Practice: MCQ, Mains and revision
Prelims MCQ
Consider the following statements about RBI's auctions in October 2026: 1. RBI accepted all competitive bids for Treasury Bills despite receiving bids exceeding notified amounts. 2. The cut-off rate for the Overnight Variable Rate Repo auction was 5.54% with partial allotment at that rate. Which of the statements is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer and trap
Answer: (b). Statement 1 is incorrect because RBI did not accept any competitive bids for Treasury Bills despite receiving bids above the notified amount.
Mains question (10 marks)
Explain how RBI uses Treasury Bills and Variable Rate Repo auctions as monetary policy instruments to manage liquidity and influence interest rates.
Explain: Explain the mechanism and significance of these auctions in monetary policy.
Intro: RBI uses Treasury Bills and Variable Rate Repo auctions to regulate liquidity and short-term interest rates.
- Treasury Bills are short-term government securities issued to manage fiscal needs and absorb liquidity.
- Variable Rate Repo auctions allow RBI to borrow funds from banks at variable rates, controlling overnight liquidity.
- Auction results, including cut-off rates and allotment, signal RBI's monetary policy stance and influence market rates.
- These instruments help maintain monetary stability and support fiscal management.
Conclusion: Thus, these auctions are vital tools for RBI to implement monetary policy effectively.
Quick revision
- What were the notified amounts for the Treasury Bills auction on October 21, 2026?
- ₹8,000 crore each for 91-day and 182-day T-Bills, and ₹7,000 crore for 364-day T-Bills.
- Did RBI accept any competitive bids in the Treasury Bills auction on October 21, 2026?
- No, RBI did not accept any competitive bids despite receiving bids exceeding the notified amounts.
- What was the cut-off rate for the Overnight Variable Rate Repo auction on October 22, 2026?
- The cut-off rate was 5.54%.
Updates
- Result of Underwriting Auction conducted on October 23, 2026 — Reserve Bank of India: Result of Underwriting Auction conducted on October 23, 2026
- Result of the 3-day Variable Rate Repo (VRR) auction held on October 23, 2026 — Reserve Bank of India: Result of the 3-day Variable Rate Repo (VRR) auction held on October 23, 2026
Sources
- [1] Reserve Bank of India: 91-Day, 182-Day and 364-Day T-Bill Auction Result: Cut-off · 2026-10-21 · official
- [2] Reserve Bank of India: Treasury Bills: Full Auction Result · 2026-10-21 · official
- [3] Reserve Bank of India: Result of the Overnight Variable Rate Repo (VRR) auction held on October 22, 2026 · 2026-10-22 · official