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Informist, Friday, Apr. 11, 2025

--RBI to buy INR 400 bln of 6 gilts via OMO auction Thu

--RBI to buy 7.37%, 2028 and 7.32%, 2030 gilts via OMO auction Thu

--RBI to buy 6.54%, 2032 and 7.18%, 2033 gilts via OMO auction Thu

--RBI to buy 7.54%, 2036 and 7.23%, 2039 gilts via OMO auction Thu

--RBI to hold OMO buy auction for INR 400 bln at 0930-1030 IST on Thu

--RBI: OMO buy auction Thu in addition to those announced on Apr 1

--RBI: Will continue to monitor evolving liquidity, market conditions

--RBI:To take measures as appropriate to ensure orderly liquidity conditions

MUMBAI – The Reserve Bank of India on Friday added to its already-scheduled purchases of government bonds this month via open market auctions, saying it will buy INR 400 billion of six gilts through an auction on Thursday. This is in addition to auctions announced by the central bank on Apr. 1, where it said it would buy central government bonds worth INR 800 billion in April.

The RBI's OMO purchases have piled up rapidly in recent weeks as it continues to infuse huge amounts of durable liquidity into the banking system that is already in surplus mode. On Wednesday, Governor Sanjay Malhotra had said the RBI would ensure "sufficient" and "adequate" provision of liquidity such that it is in surplus to the tune of around 1% of banks' net demand and time liabilities. This amounts to over INR 2 trillion. As per the latest data, the RBI absorbed INR 1.86 trillion on Thursday on a net basis, with banks parking INR 1.55 trillion at the Standing Deposit Facility.

As part of its durable liquidity infusion efforts, the RBI has so far purchased gilts worth INR 2.85 trillion via auctions in 2025, with another INR 388.25 billion of them purchased on screen. Assuming the three auctions lined up for this month, including the one announced on Friday, go through as announced, the RBI would have bought INR 4.03 trillion of bonds in the first four months of 2025.

At Thursday's auction, the RBI offered to buy 7.37%, 2028 bond, 7.32%, 2030 bond, 6.54%, 2032 bond, 7.18%, 2033 bond, 7.54%, 2036 bond, and 7.23%, 2039 bond. The quantum of individual gilts bought will be decided by the RBI. The central bank will also reserve the right to accept bids for less than the aggregate amount, buy marginally higher or lower than the aggregate amount due to rounding off, and accept or reject any or all bids wholly or partially without assigning any reasons.

All eligible participants are to submit their bids in electronic format on the RBI Core Banking Solution E-Kuber between 0930 IST and 1030 IST on Thursday. Successful bidders must ensure the availability of gilts in their subsidiary general ledger account by 1200 IST on Apr. 21, the RBI said.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Siddharth Upasani

Edited by Saji George Titus

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