OMO Auctions
RBI skips on-screen gilt buys for 7th straight week as OMO auctions continue
This story was originally published at 19:38 IST on 16 May 2025
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--RBI did not buy or sell any gilts outside OMO auction in week ended May 9
NEW DELHI – The Reserve Bank of India did not buy or sell gilts on-screen in the week to May 9, according to data released by the central bank Friday. This is the seventh consecutive week that the central bank stayed out of the secondary market, after net buying gilts worth INR 100 million on-screen in the week ended Mar. 21.
The data released Friday showed the central bank bought INR 500 billion worth of gilts through an auction under its open market operations, settled on May 7. So far in 2025, the central bank has bought gilts worth INR 4.65 trillion through OMO auctions.
The RBI announced the purchase of gilts worth INR 1.25 trillion through four auctions in May, of which the first three auctions have already taken place. At the auction on Thursday, the central bank bought the notified amount of INR 250 billion and the last scheduled auction in May is on Monday.
The RBI has focused on infusing durable liquidity into the banking system to ensure quicker transmission of rate cuts by the Monetary Policy Committee. The response to its daily variable rate repo auctions has been increasingly muted, with the average daily quantum of bids at INR 53.08 billion this week, compared with the daily notified amount of INR 250 billion.
At the post-policy press conference on Apr. 9, RBI Governor Sanjay Malhotra had said the central bank aimed to ensure proper transmission of the repo rate to the banking system and economy, and would ensure a sufficient liquidity surplus in the banking system. Since February, the Monetary Policy Committee has cut the repo rate by 50 basis points to 6.00%.
On Thursday, the RBI net absorbed INR 2.23 trillion from the banking system, and the proxy for banking system liquidity surplus has averaged over INR 1.5 trillion so far in May. End
Reported by Aaryan Khanna
Edited by Saji George Titus
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