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Informist, Friday, Nov. 21, 2025

 

--RBI sold gilts worth INR 148.10 bln via OMO in week ended Nov 14

--RBI CORRECTS: Bought, not sold, INR 148.10-bln gilts via OMO in Nov 14 wk 

 

NEW DELHI – The Reserve Bank of India bought gilts worth INR 148.10 billion through on-screen open market operations in the week ended Nov. 14, according to a revised release from the central bank after market hours. Initially, the data had shown that the RBI sold gilts of the same quantum. The buys come a week after the central bank bought gilts worth INR 124.70 billion in the Nov. 7 week, the first major purchases in the secondary market since January.

 

In the week ended Nov. 14, 'Others' – a category that includes the RBI, insurers and provident funds – had net bought INR 130.30 billion worth of gilts in the secondary market, according to Clearing Corp. of India data. The data and the previous week's buys led to heavy speculation that Friday's data would show secondary market RBI buys to the tune of INR 125 billion-INR 150 billion. The central bank's data is based on the settlement date and accounted for gilts bought on Nov. 7 on-screen and settled on Nov. 10 worth INR 46.30 billion. 

 

"It was widely expected that the RBI had stopped buying by Thursday (Nov. 13)," a dealer at a private-sector bank said. "Now the total quantum of purchases is also in line with market estimates, so I don't expect to see any more action on screen until the MPC (Monetary Policy Committee meeting Dec. 3-5)."

 

Through its purchases, the RBI infused liquidity worth INR 46.30 billion on Nov. 10, INR 40.40 billion on Nov. 11, INR 44.55 billion on Nov. 12 and INR 16.85 billion on Nov. 7. With no apparent purchases after that, the data reinforced traders' speculation that the RBI was replenishing its bond holdings after the maturity of the 5.15%, 2025 bond on Nov. 9. The central bank held between INR 150 billion – INR 300 billion of the maturing bond, according to traders' and economists' estimates.

 

Economists cited the drawdown in durable liquidity as one of the central bank's prime concerns in bringing back the operation. The liquidity hole created by the central bank's dollar sales to support the rupee may need to be filled by up to INR 3.5 trillion of government bond purchases through open market operations in Jan-Mar if India and the US do not agree to a trade deal, QuantEco Research said in a note.

The central bank last bought gilts in a significant quantum in the secondary market in the latter half of January, buying INR 388.15 billion within two weeks. It then proceeded to buy gilts at OMO auctions over the next four months, shoring up its bond portfolio by INR 5.20 trillion by May. Traders closely await the RBI's commentary on liquidity measures, including OMOs after the MPC meeting in the first week of December, with some expecting OMO auctions to buy gilts beginning as soon as next month.  End

 

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

 

Reported by Aaryan Khanna

Edited by Deepshikha Bhardwaj

 

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