You are here: Home » Economy & Policy » News
Business Standard

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

It is also conducting OMO purchase auctions in SDLs

RBI | OMO Purchase | State Development Loans

Press Trust of India  |  Mumbai 

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.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

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