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RBI announces outright purchase of Rs 10k-cr of bonds from secondary mkts

The central had till now been simultaneously buying and selling bonds of equal amounts to keep the operation liquidity neutral.

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Even though the liquidity surplus in the banking system has come down from its recent highs of Rs 7 trillion to Rs 4.67 trillion as of Wednesday, it is still at a huge surplus

Anup Roy Mumbai

3 min read Last Updated : Sep 18 2020 | 1:35 AM IST

The Reserve Bank of India (RBI) on Thursday announced it would go for an outright purchase of Rs 10,000 crore of bonds from the secondary markets on September 24.

So far, the central bank has been simultaneously buying and selling bonds of equal amounts, with an intention to keep the operational liquidity neutral.

But this is the first time in this fiscal year (April 2020-March 2021, or FY21) that the central bank has announced an outright open market operation (OMO) purchase. In OMOs, the RBI buys or sells bonds from the secondary markets.

The RBI had last done an outright OMO purchase operation

Topics : Liquidity adjustment RBI money market fund

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