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RBI to continue OMO purchase auctions of Rs 20,000 cr to assure liquidity

It is also conducting OMO purchase auctions in SDLs

Topics
RBI | OMO Purchase | State Development Loans

Press Trust of India  |  Mumbai 

RBI
Photo | Bloomberg

The on Thursday said it will continue to conduct open market operation (OMO) purchase auctions of Rs 20,000 crore, as well as OMOs in (SDLs) to support market sentiment and assure adequate liquidity.

Since the announcements made after the Monetary Policy Committee meeting on October 9, the Reserve Bank has expanded the scale of outright open market operation purchases of Government of India securities from Rs 10,000 crore to Rs 20,000 crore per auction. It is also conducting auctions in SDLs.

The total amount of OMOs conducted in the second half of 2020-21 has been of the order of Rs 66,305 crore so far.

In a statement, the said the response has been positive in both primary and secondary market auctions.

"Accordingly, based on an ongoing assessment of liquidity conditions, the Reserve Bank will continue to conduct auctions in amounts of Rs 20,000 crore as well as OMOs in SDLs, along with other operations, to support market sentiment and assure adequate liquidity all along the yield curve," it said.

It also announced a simultaneous purchase and sale of government securities for an aggregate amount of Rs 10,000 crore each on next Thursday.

"On a review of the current liquidity and financial conditions, the Reserve Bank has decided to conduct OMOs involving a simultaneous purchase and sale of government securities for an aggregate amount of Rs 10,000 crore each on November 12, 2020," it said.

Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Sec of longer maturities and selling equal amount of G-Sec of shorter maturities.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Thu, November 05 2020. 23:03 IST
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