RBI Set to Acquire Government Bonds Worth Rs 40,000 Crore on April 17
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Synopsis
The Reserve Bank of India will conduct an Open Market Operation to purchase government bonds worth Rs 40,000 crore on April 17 to manage liquidity in the financial system. This is in addition to a previous purchase of Rs 80,000 crore announced earlier in the month.
Key Takeaways
- RBI to buy Rs 40,000 crore in bonds on April 17.
- Part of ongoing liquidity management.
- Previous purchase of Rs 80,000 crore announced on April 1.
- Bids can be submitted electronically via E-Kuber.
- Results to be announced on the same day.
Mumbai, April 11 (NationPress) The Reserve Bank of India (RBI) announced on Friday that it will perform an Open Market Operation (OMO) to purchase government bonds totaling Rs 40,000 crore on April 17.
This initiative is intended to regulate the changing liquidity conditions within the financial system, as stated by the central bank in an official announcement.
This upcoming bond acquisition will be in addition to the Rs 80,000 crore in government securities previously disclosed on April 1, which is being executed in four equal segments of Rs 20,000 crore each on April 3, April 8, April 22, and April 29.
"Upon reviewing current and developing liquidity conditions, the Reserve Bank has resolved to carry out an OMO purchase auction of Central Government’s securities for a total of Rs 40,000 crore on April 17," the RBI noted.
The central bank will acquire various government securities through a multi-security auction utilizing the multiple price method.
The bonds in question include those maturing between 2028 and 2039, such as the 7.37 percent GS 2028, 7.32 percent GS 2030, 6.54 percent GS 2032, and 7.18 percent GS 2033, among others.
Nevertheless, the RBI specified that there is no specific notified amount per security and reserves the right to determine the quantity of each security to be purchased.
Participants can electronically submit their bids through the RBI’s E-Kuber platform from 9:30 am to 10:30 am on the auction day. Should any system issues arise, physical bids will also be accepted.
The auction results will be disclosed on the same day, and successful participants must ensure the availability of securities in their SGL account by 12 noon on April 21.
Reaffirming its commitment to uphold financial stability, the RBI stated that it will continuously monitor liquidity and market conditions and undertake necessary actions to maintain smooth liquidity in the system.
