---
title: "Variable Rate Repo and Reverse Repo (VRR/VRRR)"
description: "Variable Rate Repo and Reverse Repo are RBI auctions where banks bid for liquidity at market-determined rates, unlike fixed-rate LAF windows. Key UPSC GS3 tool."
url: "https://modeldiplomat.com/learn/glossary/variable-rate-repo-reverse-repo"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- Variable Rate Repo and Reverse Repo are RBI auction-based liquidity operations where banks bid for funds or place surplus at market-determined rates, not the fixed policy rate.
- How do variable rate operations differ from the fixed-rate repo window?
- Why does the RBI prefer 14-day VRR/VRRR as the main operation?
- What collateral is used in a Variable Rate Repo auction?
- How does VRRR relate to the Standing Deposit Facility?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

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Example

In December 2021 the RBI under Governor Shaktikanta Das conducted a 14-day Variable Rate Reverse Repo auction to absorb roughly ₹6.5 lakh crore of surplus liquidity created during the pandemic-era asset purchases.

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