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Informist, Monday, Feb. 10, 2025

--RBI:To buy INR 400 bln of gilts via OMO auction Thu vs INR 200 bln earlier

--RBI: Other notified details of OMO auction Thu unch from Fri release

--CONTEXT: RBI Fri notified OMO auction of 5 gilts worth INR 200 bln Thu

MUMBAI – The Reserve Bank of India revised the notified amount for the purchase of government securities through an open market operation auction on Thursday to INR 400 billion from INR 200 billion notified earlier, the central bank said in a release Monday.

"On a review of current and evolving liquidity conditions, the aggregate amount of OMO purchase has now been revised to 40,000 crore (INR 400 billion)," the release said. "The terms and conditions of the auction along with the various Government securities to be purchased remain the same as announced in the aforementioned Press Release."

On Friday, the RBI said that it will buy five bonds – the 7.17%, 2030 gilt, 7.18%, 2033 gilt, 7.10%, 2034 gilt, 7.54%, 2036 gilt and the 7.18%, 2037 gilt – at the auction Thursday. 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/lower than the aggregate amount due to rounding-off, or to accept or reject any or all the bids 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.

On Jan. 27, the RBI had announced it would buy government bonds worth INR 600 billion via open market operation auctions in three tranches. The first auction, worth INR 200 billion through five notified bonds – 7.59%, 2029 bond; 7.18%, 2033 bond; 7.10%, 2034 bond; 6.79%, 2034 bond; and 7.18%, 2037 bond – saw the RBI pick up INR 200.20 billion on Jan. 30. Another INR 200 billion OMO auction is scheduled on Feb. 20.

Among the other liquidity infusion measures announced was a 56-day variable rate repo auction on Friday, for a notified amount of INR 500 billion, that was fully subscribed. The central bank also held a $5 billion dollar/rupee buy/sell swap for a period of six months on Jan. 31. At the auction, it accepted bids worth $5.10 billion, leading to an increase of around INR 450 billion in rupee liquidity.

The Reserve Bank of India also bought gilts worth INR 77.90 billion outside open market operation auctions in the week ended Jan. 31, data from its weekly statistical supplement showed Friday. Its screen-based purchases totalled INR 388.15 billion in January. Calls for open market purchase of gilts had begun in December, with the liquidity deficit in the banking system widening due to RBI's intervention in the foreign exchange market. Net durable liquidity was in a deficit as on Jan. 24; the shortfall in January was the first since July 2019.  End

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

Reported by Vidhushi RajPurohit

Edited by Deepshikha Bhardwaj

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