The Reserve Bank today described as a "major challenge" the management of the large Government borrowing programme in FY 10. The challenge lies in managing the borrowing programme in a non-disruptive manner, it said.
"The Reserve Bank would continue to use a combination of monetary and debt management tools to manage the Government borrowing programme to ensure successful completion of Government borrowings in a smooth manner," it said in its annual policy statement for 2009-10 released here.
The apex bank has already announced an OMO calendar to support Government market borrowing through secondary market purchase of Government securities.
During the first-half of 2009-10, planned OMO purchases and market stabilisation scheme (MSS) unwinding will add primary liquidity of around Rs 1,20,000-crore, it said.
This, by way of monetary impact, is equivalent to a CRR reduction of 3 percentage points, it said.
"This should leave adequate resources with banks to expand credit," the apex bank noted.
