Rbi news: The Reserve Bank of India (RBI) has taken a big decision to increase liquidity in the banking system. The RBI has announced the purchase of government bonds worth Rs 1 lakh crore in 2 phases through the Open Market Operation (OMO) auction. Along with this, the RBI will also organize a dollars of $ 10 billion-rupaya purchase/sales swap auction on 24 March.
RBI bond procurement scheme
First auction – ₹ 50,000 crore on March 12
Second auction – ₹ 50,000 crore on March 18
The details of each auction will be notified separately.
The RBI said that it would monitor liquidity and market conditions and take necessary steps according to the situation so that the market remains smooth liquidity.
Liquidity crisis and RBI initiative
In December, the liquidity of the rupee declined due to advance tax payment and sales of dollars in the foreign exchange market. Since the late January, the RBI has been taking continuous steps to increase liquidity.
So far, RBI has bought government bonds worth Rs 1.4 lakh crore. Daily and long -term convertible rate repo (VRR) are also presented. The exchange of dollars and purchases has also increased the flow of cash in the banking system.
RBI can take further steps
About Rs 5 lakh crore can be withdrawn from the banking system by payment of excise, GST and advance tax in the month of March.
In such a situation, market analysts believe that the RBI may hold a large convertable rate repo auction to remain close to the money market rate repo rate (6.25%). These steps of RBI will keep the market stability and unnecessary fluctuations in interest rates will be avoided.
