RBI announces Rs 10,000-cr bond buyback on Thursday to improve liquidity

Continuing with its commitment to provide adequate liquidity, the Reserve Bank Tuesday announced a Rs 10,000-crore bond buyback on Thursday.

The central bank had earlier committed to purchase government securities under its open market operations for an aggregate Rs 50,000 crore in January and has so far done Rs 30,000 crore.

The latest OMO to be conducted Thursday has been decided "based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward," the Reserve Bank said.

The RBI will buyback five securities maturing between June 2019 and December 2033 through the purchase, it said and also specified details of each security.

The eligible participants should submit their offers in electronic format on the RBI's core banking solution (E- Kuber) system on January 24.

The result of the auction will be announced the same day and payment to successful participants will be made on the following day.

It can be noted that ever since August, the system is passing through a liquidity deficit which is being bridged by the central bank using various tools with OMOs being a primary instrument deployed.