The Reserve Bank of India (RBI) conducted the first open market operation (OMO) in state development loans (SDLs) on Thursday, buying Rs 10,000 crore of securities under the scheme.
SDL holders offered Rs 15,475 crore of bonds against the OMO size of Rs 10,000 crore. The lowest cut-off yield was offered for Karnataka’s 9-year bond at 6.4746 per cent, while the highest cut-off was for Jammu Kashmir’s 10-year SDL at 6.6813 per cent. Overall, two papers each of 15 states were purchased in the OMO.
The OMOs in state bonds are aimed at keeping the borrowing cost low for states, and bringing