RBI to purchase govt securities under OMO

The Reserve Bank of India on Friday said that it will conduct an auction on June 13 to purchase government securities under Open Market Operation (OMO) for ₹15,000 crore to infuse durable liquidity.

In the current financial year so far, it conducted OMO purchase of five government securities on two occasions — on May 2 and May 16 — infusing ₹12,500 crore in each auction. The total amount of government securities offered by market participants was ₹27,426 crore (face value) on May 2, and was ₹29,479 crore on May 16.

As per the first bi-monthly monetary policy statement for 2019-20, systemic liquidity moved from a daily net average surplus of ₹27,928 crore during February 1-6, into deficit during February 7- March 31, reflecting the build-up of government cash balances.

Currency in circulation expanded sharply in February-March. The liquidity needs of the system were met through injection of durable liquidity amounting to ₹37,500 crore in February and ₹25,000 crore in March through OMOs. Consequently, total durable liquidity injected by the RBI through OMOs aggregated ₹2,98,500 crore for 2018-19.