RBI plans to buy back Rs 30,000 crore worth of bonds on Thursday

The Reserve Bank of India (RBI) plans to buy back Rs 30,000 crore worth of government securities on Thursday. The government has offered to buy back the 7.35 per cent 2024 bond maturing on June 22, the 8.4 per cent 2024 bond maturing on July 28, the 6.18 per cent 2024 bond maturing on November 4, the FRB 2024 bond maturing on November 7, and the 9.15 per cent 2024 bond maturing on November 14.

The previous two auctions conducted by the RBI saw low participation. The RBI repurchased Rs 2,069 crore, Rs 10,512 crore, and Rs 5,111 crore worth of government bonds, against notified amounts of Rs 60,000 crore in the first auction and Rs 40,000 crore in the previous two auctions.

By repurchasing its own outstanding bonds from the market before they mature, the government reduces its liabilities and strengthens its fiscal position. The process involves using government funds to buy back these bonds, which are then typically retired, decreasing the total outstanding debt. This strategy allows the government to improve its debt profile by repurchasing higher-cost or shorter-term bonds.