The Reserve Bank of India (RBI) stepped up efforts to absorb excess liquidity from the banking system by announcing a 30-day Variable Rate Reverse Repo (VRRR) auction for ₹7 lakh crore. The move came as surplus liquidity in the banking system reached exceptionally high levels following large foreign-currency inflows. Under a VRRR auction, banks can temporarily park their surplus funds with the RBI for a specified period and earn interest on them. By conducting a 30-day operation, the RBI sought to keep excess money out of the banking system for longer and prevent abundant liquidity from pushing short-term market interest rates significantly below the policy repo rate. The liquidity surplus had risen sharply amid substantial foreign-currency inflows and related forex operations. The banking system's surplus was estimated at around ₹10.32 lakh crore on September 3, prompting the RBI to increase the scale and duration of its liquidity-absorption operations.