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The Reserve Bank of India (RBI) has decided to purchase Government Securities (G-Secs) under Open Market Operations (OMOs) in two tranches of ₹15,000 crore each on March 24 and March 30 to ensure that the financial markets have adequate liquidity amid Covid-19-related dislocations.
This auction comes even as the RBI underscored that stress in certain financial market segments is still severe and financial conditions remain tight in the wake of the pandemic. The positive response to the OMO purchase auction of G-Secs on Friday also seems to have prompted the central bank to go in for more OMO purchases.
Against the notified amount of ₹10,000 crore at the OMO purchase auction of four G-Secs – 8.20 per cent (coupon rate) GS (Government Security) maturing in 2022; 7.37 per cent GS 2023; 7.32 per cent GS 2024; and 7.72 per cent GS 2025 – conducted on Friday, the RBI received bids aggregating ₹45,049 crore. It accepted bids for liquidity infusion aggregating ₹10,000 crore.
At the March 24 auction, the RBI will purchase four securities – 6.84 per cent GS 2022; 7.72 per cent GS 2025; 8.33 per cent GS 2026; and 7.26 per cent GS 2029 – for an aggregate amount of ₹15,000 crore using the multiple price method. There is no notified amount against any of these securities within the aggregate ceiling of ₹15,000 crore set for the operation.
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