RBI to infuse Rs. 12,500 crore to provide liquidity

In a move to ease the liquidity crisis, the country’s central bank RBI said that it will infuse Rs. 12,500 crore of liquidity into the system through the purchase of government bonds (G-sec). The Reserve Bank of India (RBI) would conduct purchases of five government bonds under open market operations (OMOs) on June 20, 2019.

RBI in its release said based on an assessment of the prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct a purchase of five government securities under OMOs. The Central bank would buy 7.94 per cent-2021; 7.72 per cent-2025; 6.79 per cent-2027; 7.61 per cent-2030 and 7.73 per cent-2034 government bonds under the OMO.

Recently, on June 11, the RBI had infused Rs. 15,000 crore into the system through OMO purchase of six government bonds. RBI uses OMO for injecting liquidity into the system through the purchase of G-sec. The sale or buying of G-secs infuses or reduces liquidity in the banking system.