RBI announces special OMO of Rs 20,000 crore

Recently, the Reserve Bank of India announced to conduct open market operations (OMO) of government securities worth Rs 20,000 crore in two equal tranches.

In a statement, the central bank said, “On a review of current and evolving liquidity and market conditions, RBI has decided to conduct simultaneous purchase and sale of govt securities under Open Market Operation (OMO) for an aggregate amount of Rs 20,000 crore in two tranches of Rs 10,000 crore each.”

On August 27 and September 3, the auctions will be held and the results will be announced on the same day.

Maturing on November 4, 2024, February 15, 2027, May 11, 2030, and August 28, 2032, the central bank also said it will purchase government securities comprising 6.18 per cent, 8.24 per cent, 5.79 per cent and 7.95 per cent. Securities maturing between October 2020 and November 2020 will be sold by the central bank.

Between 10 and 11 AM, eligible participants will have to submit their bids and offers in electronic format on the RBI core banking solution (E-Kuber) system. The objective is to raise short-term yields and lower long term yields.