Comments
Our Bureau
The Reserve Bank of India (RBI), on Wednesday, said it will conduct open-market operations (OMO) entailing purchase of four government securities (G-Secs) aggregating ₹10,000 crore on March 20 to infuse liquidity in the banking system in the wake of tightening financial conditions and hardening yields.
When it announced the OMO, the RBI specifically referred to certain financial market segments experiencing a tightening of financial conditions as reflected in the hardening of yields and widening of spreads in the wake of Covid-19 pandemic risks.
The central bank emphasised that it is important to ensure that all market segments remain liquid and stable and function normally.
The four G-Secs that the RBI will purchase using the multiple price method on Friday are: 8.20 per cent GS 2022; 7.37 per cent GS 2023; 7.32 per cent GS 2024; and 7.72 per cent GS 2025. The central bank said there is no notified amount against any of these securities within the aggregate ceiling of ₹10,000 crore set for the operation.
This OMO purchase announcement comes even as the central bank, on March 16, announced that it will conduct additional Long-Term Repo Operations (LTROs) to infuse liquidity in the banking system for up to a total amount of ₹1-lakh crore at the policy repo rate beginning March 18.
Meanwhile, at the LTRO conducted today for a notified amount of ₹25,000 crore with a three-year tenor, the RBI received 21 bids aggregating ₹27,096 crore. It accepted bids aggregating ₹25,012 crore.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.