Current affairs, 7 September 2026: the RBI drains near-record liquidity through VRRR auctions, and the Defence Acquisition Council clears ₹1.1 lakh crore of buys

7 September 2026 links the previous fortnight’s story to this one — the flood of foreign deposits the RBI attracted has now become a liquidity problem it must manage — while the Defence Acquisition Council cleared a big procurement list. Numbers below.

RBI drains near-record liquidity with VRRR

Banking-system liquidity climbed to a near-record of about ₹11.16 lakh crore (as of 6 September) after the RBI’s special forex-mobilisation scheme drew about $136.38 billion by 31 August — roughly $127.23 billion via FCNR(B) deposits, $5.26 billion through overseas borrowings and $3.89 billion via external commercial borrowings. To keep overnight rates from sliding below the policy rate, on 7 September the RBI absorbed about ₹6 lakh crore through two overnight Variable Rate Reverse Repo (VRRR) auctions; an earlier 30-day ₹7 lakh crore VRRR drew a tepid response (bids of about ₹2.59 lakh crore). The FCNR(B) window was closed on 31 August, a month early. Reserve Bank of India · The New Indian Express

Defence Acquisition Council clears ₹1.1 lakh crore

The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, granted Acceptance of Necessity (AoN) for acquisitions worth about ₹1.10 lakh crore across the three services — including CBRN reconnaissance vehicles, radars, advanced light helicopters, marine gas turbines, bridge systems and mechanical mine-layers. About 98% of the procurement will be from Indian industry, in line with Atmanirbhar Bharat. The Times of India

Why it matters for an exam: a VRRR is the tool the RBI uses to temporarily absorb surplus cash (the reverse of a repo, which injects it), and the DAC — chaired by the Defence Minister — is the body that gives the first-stage AoN approval for military purchases.

What to write in your notebook

Three lines:

1. Liquidity: system surplus about ₹11.16 lakh crore (6 September) after $136.38 billion of forex inflows; RBI absorbed ~₹6 lakh crore via overnight VRRR on 7 September; FCNR(B) closed 31 August.
2. Tool: VRRR = Variable Rate Reverse Repo, used to absorb excess liquidity (repo injects).
3. Defence: DAC (chaired by Rajnath Singh) cleared ~₹1.1 lakh crore of buys, ~98% from Indian industry (Atmanirbhar Bharat).