"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations (OMO) by purchasing government securities for an aggregate amount of Rs 8,000 crore on December 21, 2012 through multi-security auction," the central bank said in a statement.
There has been some tightening on the liquidity front due to advance tax outgo. Following this, the banks' borrowing from the RBI has gone up to Rs 1,51,770 crore today from 1,46,300 crore.
Earlier in the day, RBI Deputy Governor Subir Gokarn said the current high borrowing by banks is the result of large cash balance with the government and the advance tax payout.
He assured, however, that RBI will not let the liquidity condition go out of hand, and said if there is a need to do more OMOs it will be done.
Since the beginning of this month, RBI had done two Open Market Operations of Rs 12,000 crore each.