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RBI announces Rs 25,000 cr liquidity injection in May as liquidity dries up

The purchase, called as open market operations (OMOs), will be undertaken in two equal tranches with the first one on May 2

Press Trust of India  |  Mumbai 

rbi, reserve bank of india

The Reserve Bank Monday announced a Rs 25,000-crore through purchase of in May.

The purchase, called as (OMOs), will be undertaken in two equal tranches with the first one on May 2, the central bank said in a statement.

The said the OMOs are being carried out "based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward".

It can be noted that the has been using OMOs through the prolonged period of weak liquidity starting FY19 itself and repurchased bonds of over Rs 2.8 trillion during the last fiscal year.

Lately, it has devised a new tool in rupee-dollar swaps as a way to bridge the liquidity gap. It has already done two such auctions of $5 billion each on March 26 and April 23. While the first was a huge success with over three times demand, the details of Tuesday auction is awaited.

At the May 2 repurchase, the said it will repurchase five securities with dates of maturity extending from next year to 2032.

The date of the next auction and the government bonds to be purchased in that auction would be communicated in due course, it said.

The apex bank also added that the OMO amount is indicative and the RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions.

First Published: Tue, April 23 2019. 21:33 IST