- MUMBAI — The
Reserve Bank of India (RBI) on Friday announced that it will conduct an Open
Market Operation (OMO) purchase of government bonds worth INR 40,000 crore on
April 17.
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- The move aims to manage evolving liquidity conditions in the
financial system, the central bank said in an official statement.
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- This bond purchase will be in addition to the INR 80,000
crore worth of government securities already announced on April 1, which is
being conducted in four equal tranches of INR 20,000 crore each on April 3, 8,
22, and 29.
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- "In a review of current and evolving liquidity
conditions, the Reserve Bank has decided to conduct an OMO purchase auction of
Central Government’s securities for an aggregate amount of INR 40,000 crore to
be held on April 17" the RBI stated.
Also read: India's forex reserves surge to $676.3 billion
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- The central bank will purchase multiple government
securities through a multi-security auction using the multiple price method.
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- The bonds include those maturing between 2028 and 2039, such
as the 7.37 per cent GS 2028, 7.32 per cent GS 2030, 6.54 per cent GS 2032, and
7.18 per cent GS 2033, among others.
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- However, the RBI clarified that there is no security-wise
notified amount and reserves the right to decide on the quantum of purchase of
each security.
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- Participants can submit their bids electronically via the
RBI’s E-Kuber platform from 9:30 am to 10:30 am on the auction day. In case of
any system failure, physical bids will also be accepted.
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- The results of the auction will be announced on the same
day, and successful participants must ensure the availability of securities in
their SGL account by 12 noon on April 21.
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- Reiterating its commitment to maintain financial stability,
the RBI said it would continue to monitor liquidity and market conditions
closely and take necessary measures to ensure smooth liquidity in the system.
