RBI announces OMO purchase auctions of Rs 50000 crore for January 2019 to inject durable liquidity

Scales up OMO purchase auctions size to Rs 50000 crore for December 2018 from Rs 40000 crore announced earlier

The Reserve Bank of India (RBI) has announced further purchases of Government Securities under Open Market Operations (OMOs) for an aggregate amount of Rs 50000 crore in the month of January 2019, based on an assessment of the durable liquidity needs going forward. The operations will be conducted through five auctions of Rs 10000 crore each.

On a review of the evolving liquidity conditions, the RBI has also decided to scale up the amounts to be purchased in the remaining two OMO auctions scheduled in December 2018 to Rs 15000 crore each from Rs 10000 crore each earlier. Consequently, the total injection of durable liquidity for the month of December 2018 would amount to Rs 50000 crore from Rs 40000 crore earlier.

The liquidity conditions will continue to be monitored and depending on the assessment, RBI will consider similar quantum of OMO purchases until end of March 2019. The exact calibration of the quantum of OMO would depend on sustained changes in the behaviour of currency in circulation, the magnitude of sterilisation operations for RBI's forex operations and other relevant factors.

The auction dates and the Government securities to be purchased in the respective auctions would be communicated in due course. The OMO amount stated above is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions.

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