RBI to Inject ₹1.25 Lakh Crore Liquidity in May via OMO Purchases

The Reserve Bank of India (RBI) has announced open market operation (OMO) purchase auctions of Government of India securities, with a total value of ₹1.25 lakh crore. The auctions will be conducted in four phases between May 6 and May 19, 2025.

Auction Details

The RBI stated that it would issue separate notifications ahead of each tranche. Bids for these auctions will be accepted electronically through the E-Kuber platform. In case of any system failure, physical bids may be considered. Auction results will be announced on the same day.

Background 

The decision follows a review of the current and evolving liquidity conditions. The RBI had earlier conducted bond purchases amounting to ₹80,000 crore on April 1 and ₹40,000 crore on April 11 through the OMO route. In March, the central bank carried out OMO purchases of ₹1 lakh crore in two tranches of ₹50,000 crore each.

Apart from OMOS, the RBI also conducted a $10 billion-rupee buy/sell swap auction for 36 months. Recently, the central bank reduced the benchmark repo rate by 25 basis points and shifted its monetary policy stance from neutral to accommodative.

About Open Market Operations

Open market operations involve the purchase or sale of government securities by the RBI to manage liquidity conditions in the market. The RBI buys securities to inject liquidity when needed and sells them to absorb surplus liquidity.

Read more: RBI’s ₹1 Lakh Crore OMO and $10 Billion Forex Swap: A Move to Address Liquidity Challenges

Conclusion

The RBI’s upcoming OMO purchases in May are part of its measures to manage liquidity and ensure the smooth functioning of the financial system.

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