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RBI to conduct additional OMO purchase, sale of govt securities worth Rs 20,000 crore

The Reserve Bank of India announced the additional special open market operation on Monday of government securities worth 20,000 crores in two tranches of ₹10,000 crores each.

In measure to foster orderly market conditions, RBI will conduct “additional special open market operation involving simultaneous purchase and sale of government securities for an aggregate amount of ₹20,000 crores in two tranches of ₹10,000 crores each,” the central bank said in a statement.

The auctions would be conducted on September 10 and September 17.

The RBI will also conduct term repo operations for an aggregate amount of ₹100,000 crores at floating rates (i.e., at the prevailing repo rate) in the middle of September to assuage pressures on the market on account of advance tax outflows.

With the heightening of Covid-19 pandemic risks, certain financial market segments have been experiencing a tightening of financial conditions as reflected in the hardening of yields and widening of spreads.

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The RBI has been constantly reviewing current and evolving liquidity and market conditions.

“The RBI remains committed to use all instruments at its command to revive the economy by maintaining congenial financial conditions, mitigate the impact of Covid-19 and restore the economy to a path of sustainable growth while preserving macroeconomic and financial stability,” the bank also said.

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