Reserve Bank of India announces special open market operations

In the view of current and evolving liquidity as well as market conditions, the country’s central bank, Reserve Bank of India (RBI) on Monday has decided to conduct simultaneous purchase and sale of government securities worth Rs 10,000 crore each through open market operations (OMO) on July 2.

Open Market Operations is one of the tools of the central bank to inject liquidity or bring it down in the financial system.

RBI said that it will buy government securities at 6.79 per cent, 7.26 per cent, 6.68 per cent and 6.57 per cent maturing on May 15, 2027, January 14, 2029, September 17, 2031 and December 5, 2033, respectively.

Besides, RBI will sell securities that mature between October 15, 2020 and April 29, 2021. It further said that it reserves the right to decide on the quantum of purchase or sale of individual securities, accept bids or offers for less than the aggregate amount, purchase or sell marginally higher or lower than the aggregate amount due to rounding off and to accept or reject any or all the bid/offers either wholly or partially without assigning any reasons.

Eligible participants can submit their bids/offers in electronic format on Reserve Bank of India Core Banking Solution (E-Kuber) system between 10.00 am and 11.00 am on July 02, 2020. The result of the auctions will be announced on the same day.