The Reserve Bank of India (RBI), on Thursday, received bids amounting to seven times the notified amount of ₹10,000 crore at the open market operation (OMO) purchase of four government securities (G-Secs).
Simultaneously, the central bank received bids aggregating three times the notified amount of ₹10,000 crore at the OMO sale of four Treasury bills.
In OMO purchase, the RBI buys G-Secs (or GS) or Treasury Bills (TBs) from the market players. In OMO sale, the RBI sells G-Secs or TBs from the market players.
Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, said the main purpose of the simultaneous OMO purchase and sale (Operation Twist) is to bring down the yields at the longer end of the government securities market.
At the OMO purchase auction, the RBI received the highest amount of ₹30,336 crore for the 7.26 per cent GS 2029. It accepted bids aggregating ₹3,000 crore at a weighted average yield (WAY) of 6.1675 per cent and weighted average price (WAP) of ₹107.16.
The RBI received the second highest amount of ₹22,119 crore for the 6.79 per cent GS 2027. It accepted bids aggregating ₹3,785 crore at a WAY of 5.8854 per cent and WAP of ₹105.04.
At the OMO sale auction, the RBI received the highest amount of ₹14,000 crore for the 364-Day TB (DTB) maturing on April 29, 2021. It accepted bids aggregating ₹2,000 crore at a WAY of 3.39 per cent and WAP of ₹97.29.
The maximum amount of bid that the RBI accepted at the OMO sale auction was ₹5,250 crore (against the bid amount of ₹6,250 crore) for the 182-DTB maturing on October 15, 2020, at a WAY of 3.3416 per cent and WAP of ₹99.06.