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Informist, Friday, Oct. 18, 2024

--RBI did not buy or sell any gilts via OMO in week ended Oct 11 

NEW DELHI – The Reserve Bank of India Friday said it had not bought or sold gilts through screen-based open market operations in the week ended Oct. 11, the second time in three weeks. It had sold INR 200 million worth of bonds through this route in the previous week.

Many traders look at the slowing sales in line with the Monetary Policy Committee's change of stance to 'neutral' from 'withdrawal of accommodation' last week. The banking system liquidity was in a surplus of over INR 1 trillion in the week ended Oct. 11. Bond traders had not considered the small sale of INR 200 million as an intent from the RBI to re-commence its screen-based sales, and said they would not be surprised if the hiatus now continues for several weeks.

In the week ended Sept. 27, the central bank broke its nearly three-month streak by not conducting screen-based OMO sales. Between Jul. 5 and Sept. 20, the central bank had sold gilts to the tune of INR 240.40 billion through OMO, data showed. The pace of these sales has been slowing in recent weeks. The RBI only had INR 12.15 billion in screen-based bond sales over the past four weeks, with sales on only two days.  End 

Reported by Aaryan Khanna

Edited by Tanima Banerjee

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