The Reserved Bank of India (RBI) has announced that it will infuse Rs 36,000 crore by purchasing open market bonds this October to add liquidity in the market.
The central banking authority of India, RBI has revealed its plans to infuse Rs 36,000 crore by conducting open market operation (OMO) in the second, third and fourth week of October. The RBI will purchase Government securities for an aggregate amount of Rs 360 billion, which is expected to liquidate the market. The money injection is also expected to boost seasonal growth in currency circulation of the country ahead of the festive season and meet the demand of currency.
The date of auctions during which the central bank will purchase bonds from the government will be decided with respect to the securities and they will be communicated accordingly. This will be the second liquidity injection within half fiscal year, after one conducted in September to resolve the strains in the money market. The previous injection included two open market operations conducted by the RBI, which brought additional funds from the SLR of banks that helped to meet the Liquidity Coverage Ratio average requirements.