The Reserve Bank of India (RBI) has announced fresh purchase auctions of government securities under its open market operations (OMO) to further stabilise liquidity in the banking system. The central bank will conduct these auctions in multiple phases, ensuring a systematic infusion of funds to support economic stability.
The RBI will conduct fresh government securities purchase auctions amounting to ₹80,000 crore. These will take place in four tranches of ₹20,000 crore each on April 3, April 8, April 22, and April 29. The central bank has emphasised that it will continue monitoring liquidity and market conditions to ensure an orderly financial environment.
This move follows similar liquidity injections in March when the RBI conducted OMO purchases worth ₹1 lakh crore in two tranches of ₹50,000 crore each. Additionally, the central bank executed a dollar-rupee buy/sell swap auction of $10 billion for 36 months to further manage liquidity.
FY25 concluded with a banking liquidity surplus of ₹894 billion, marking a significant shift from the previous week’s deficit of ₹2.4 trillion, with an average deficit of ₹1.3 trillion. This improvement is attributed to a substantial RBI liquidity infusion of ₹3.2 trillion, alongside increased government spending and recent foreign portfolio investment (FPI) inflows.
Looking ahead, Q1FY26 is projected to maintain ample liquidity, driven by an estimated ₹2.8-3 trillion RBI dividend by the end of May. The surplus is expected due to massive profits generated from foreign exchange (FX) gross sales, estimated between $360-375 billion, while the budgeted RBI surplus stands at ₹2.2 trillion.
The RBI’s latest move to conduct fresh OMO auctions aligns with its broader strategy to manage liquidity efficiently and support economic stability. With favourable conditions projected for Q1FY26, market participants will closely watch the central bank’s stance in its upcoming policy meeting.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Published on: Apr 2, 2025, 2:40 PM IST
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