RBI to infuse Rs50,000cr in January under OMO

The central bank has also decided to scale up the amounts to be purchased in the remaining two OMO auctions scheduled in December to Rs15,000cr each.

Dec 19, 2018 02:12 IST India Infoline News Service

The Reserve Bank of India (RBI) will inject Rs50,000cr under Open Market Operations (OMOs) through five auctions, the central bank said in a press note on Tuesday.

"Based on an assessment of the durable liquidity needs going forward, the RBI has decided to conduct a purchase of Government Securities under Open Market Operations (OMOs) for an aggregate amount of Rs50,000cr in the month of January 2019. The operations will be conducted through five auctions of Rs10,000cr each," the bank said in a press note.

Further, the central bank has also decided to scale up the amounts to be purchased in the remaining two OMO auctions scheduled in December to Rs15,000cr each. Consequently, the total injection of durable liquidity for the month of December would amount to Rs50,000cr. The decision has been taken to address the financial sector's liquidity crunch.

Moreover, the RBI informed that it will continue to monitor the liquidity conditions and depending on those it will consider a similar quantum of OMO purchases by the end of March 2019. “The exact calibration of the quantum of OMO would depend on sustained changes in the behavior of currency in circulation, the magnitude of sterilization operations for RBI’s forex operations and other relevant factors," the central bank added.

It further added that the OMO amount stated above is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions.

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