RBI did not buy or sell any gilts outside of OMO auction in week to Apr 11
This story was originally published at 12:21 IST on 19 April 2025
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--RBI: Didn't buy or sell any gilts outside of OMO auction in week to Apr 11
MUMBAI – The Reserve Bank of India did not buy or sell gilts in the secondary market in the week ended Apr. 11, central bank data released Friday showed. On Apr. 8, it had bought the entire notified amount of INR 200 billion of gilts through auction under its open market operations, which was settled the next day.
The central bank last bought gilts in the secondary market in the week ended Mar. 21, when it net bought gilts worth INR 100 million. In January, the RBI had bought gilts amounting to INR 388.15 billion. But has mostly stayed away from on-screen purchases since then. So far in 2025, the central bank has bought gilts amounting to INR 3.25 trillion through several OMO auctions.
The RBI has two more OMO auctions scheduled in April, one on Tuesday and the other on Apr. 29. This is part of the INR 800-billion worth of gilt buys through four auctions the central bank had announced at the beginning of the month.
On Thursday, the RBI bought gilts worth INR 400 billion through an OMO auction, which was over and above the already-scheduled auctions for April. The central bank has offered to buy five gilts worth INR 200 billion through auction on Tuesday. These are the 6.10%, 2031 gilt; the 7.26%, 2032 gilt; the 7.50%, 2034 gilt; the 8.30%, 2040 gilt; and the 9.23%, 2043 gilt.
At the post-policy press conference on Apr. 9, RBI Governor Sanjay Malhotra had said that the aim of the central bank was to ensure proper transmission of the repo rate and that it would ensure a sufficient liquidity surplus in the banking system. The RBI's Monetary Policy Committee unanimously cut the repo rate to 6.00% and changed its stance to 'accommodative' from 'neutral' earlier this month.
The central bank began infusing liquidity in the latter half of January after the liquidity deficit in the banking system shot up due to heavy dollar sales by the RBI in the foreign exchange market to support the rupee. This exacerbated the tightness in liquidity following the advance tax payments in December. In addition to the OMOs, the central bank announced several measures to infuse durable liquidity, including daily and long-tenure variable rate repo auctions and dollar/rupee buy/sell swap auctions. Since Mar. 29, systemic liquidity has been in a surplus. On Wednesday, the net liquidity absorbed by the central bank, a proxy for systemic liquidity surplus, is INR 1.70 trillion. End
Reported by Cassandra Carvalho
Edited by Ashish Shirke
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