RBI to buy 5 gilts worth INR 200 bln via OMO auction on Thursday
This story was originally published at 19:32 IST on 27 January 2025
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--RBI: To buy 5 gilts worth INR 200 bln via OMO auction on Thu
--RBI: To buy 7.59%, 2029, 7.18%, 2033 gilts via OMO auction on Thu
--RBI: To also buy 7.10%, 2034, 6.79%, 2034 gilts via OMO auction on Thu
--RBI: To also buy 7.18%, 2037 gilt via OMO auction on Thu
--RBI: To hold OMO buy auction 1030-1130 IST on Thu
MUMBAI – The Reserve Bank of India will buy five government securities worth INR 200 billion through an open market operation auction on Thursday, the central bank said in a release Monday. This is its first purchase of gilts via an auction since September 2021, the last phase of its Government Securities Acquisition Programme 2.0.
The RBI will buy five gilts – 7.59%, 2029 bond; 7.18%, 2033 bond; 7.10%, 2034 bond; 6.79%, 2034 bond; and 7.18%, 2037 bond – at the auction. The quantum of individual gilts bought will be decided by the RBI. The RBI will also reserve the right to accept bids for less than the aggregate amount, buy marginally higher/lower than the aggregate amount due to rounding-off, or to accept or reject any or all the bids either wholly or partially without assigning any reasons.
All eligible participants can submit their bids in electronic format on the RBI Core Banking Solution (E-Kuber) between 1030 IST and 1130 IST on Thursday. The successful participants should ensure availability of the gilts in their subsidiary general ledger account by 1200 IST on Friday.
Earlier Monday, the RBI announced it would buy government bonds worth INR 600 billion via open market operation auctions in three tranches. As part of its measure, the RBI will hold the three OMO purchase auctions worth INR 200 billion on Thursday, Feb. 13, and Feb. 20. Among the other liquidity infusion measures announced was a 56-day variable rate repo auction on Feb. 7, for a notified amount of INR 500 billion. The central bank will also conduct a dollar/rupee buy/sell swap for $5 billion for a period of six months, it said.
The RBI had bought gilts worth INR 101.75 billion through screen-based operations in the week ended Jan. 17, data from its weekly statistical supplement showed Friday. These were its largest gross weekly bond purchase since the RBI ended its government securities acquisition programme in September 2021. Calls for open market purchase of gilts have been increasing with the liquidity deficit in the banking system widening due to RBI's intervention in the foreign exchange market. Net durable liquidity fell into a deficit as on Jan. 10, the first time on record since at least 2020. End
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Reported by Srijita Bose
Filed by Aaryan Khanna
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