RBI to buy bonds worth Rs 20,000 crore under open market operations on February 10


2021-02-08 07:12:30

NEW DELHI: The Reserve Bank of India (RBI) on Monday announced its plan to buy bonds worth Rs 20,000 crore under Open Market Operations (OMO) to support the government’s borrowing programme.
“On a review of current liquidity and financial conditions, therefore, the Reserve Bank has decided to conduct purchase of government securities under OMO for an aggregate amount of Rs 20,000 crore on February 10, 2021,” the central bank said in a press release.
Holding policy interest rates unchanged at record lows on Friday, Reserve Bank of India governor Shaktikanta Das assured investors that its stance on liquidity remained accommodative and that the government’s Rs 12.06 lakh crore borrowing programme for the fiscal year starting April would be managed in a smooth and orderly manner.
The central bank sold only Rs 9,000 crore of bonds versus Rs 31,000 crore it had set out to sell on Friday, with underwriters to the auction buying Rs 8,810 crore worth of the paper, after the market demanded higher yields.
The RBI in its release mentioned that eligible participants must submit their bids in electronic format on the central bank’s core banking solution (e-Kuber) system between 10:00 am and 11:00 am on February 10, 2021.
Only in the event of system failure, physical bids would be accepted, it added.
The result of the auctions will be announced on the same day and successful participants should ensure availability of securities in their SGL (Subsidiary General Ledger) account by 12 noon on February 11, 2021.
(With inputs from Reuters)



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