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Informist, Friday, Dec. 5, 2025

 

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--RBI: To hold INR 1-tln OMO buy auction in 2 tranches 
--RBI: To hold INR 500-bln OMO buy auction on Thu 
--RBI: To hold INR 500-bln OMO buy auction on Dec 18 
--RBI: To hold $5 bln 3-year dlr/rupee buy/sell swap Dec 16
--RBI Malhotra: To conduct FX buy/sell swap of 3 year 
--RBI Malhotra: To conduct 3-year, $5 bln dlr/rupee buy/sell swap 
--RBI Malhotra: to conduct 3-yr $5 bln dlr/rupee buy/sell swap in Dec 
--RBI Malhotra: Hopeful OMO, FX swap will facilitate monetary transmission 
--RBI Malhotra: Hopeful OMO buys, FX swap will ensure sufficient liquidity 
--RBI Malhotra: To buy INR 1 tln worth of bonds via OMO auctions 
--RBI Malhotra: To buy INR 1 tln worth of bonds via OMO in Dec 
--RBI Malhotra: Can simultaneously conduct OMO buys, VRRR ops 
--RBI Malhotra:OMO main purpose is liquidity mgmt, not influencing g-sec ylds

 

MUMBAI – The Reserve Bank of India will conduct open market bond purchases of INR 1.00 trillion, along with a three-year dollar-rupee buy-sell swap of $5 billion, in December, to inject durable liquidity into the banking system, RBI Governor Sanjay Malhotra said in his statement at the outcome of the Monetary Policy Committee meeting Friday.

 

Traders in the bond market were expecting OMO purchases of INR 2.00 trillion or more, and had priced in a quantum of INR 1.50 trillion. Most traders in the bond and foreign exchange markets were not expecting a dollar-rupee buy-sell swap. Those who were, expected a quantum of $2 billion to $3 billion. Most traders had expected the OMO buys to be conducted in Dec-Mar.

 

In a separate release Friday, the RBI specified that the OMO purchases would be in two tranches. The RBI will conduct an INR-500-billion OMO purchase auction on Thursday as well as on Dec. 18. The buy-sell swap will held on Dec. 16. The RBI last held an OMO auction on May. 19. In Jan-May, the central bank infused over INR 5.00 trillion through OMO auctions.

 

The main purpose of conducting the open market purchases is liquidity management and not influencing yields on government bonds, Malhotra said. Yield on the benchmark 10-year government bond 6.48%, 2035 fell around 3 basis points immediately after the announcement of the auction.

 

The governor clarified that injection of liquidity through purchase of government securities under OMOs and that through short-term liquidity operations like variable rate repo and reverse repo auctions serve very different purposes. "So, it is quite possible that we inject durable liquidity through purchase of government securities under OMO on the one hand while simultaneously withdrawing transient liquidity through a VRRR operation on the other hand," Malhotra said.

 

In the three-year dollar-rupee buy-sell swap auction, the RBI will buy dollars for immediate delivery and will sell them for delivery after three years. The last such auction was conducted in March, when the central bank auctioned buy-sell swaps worth $10 billion using the multiple-price method. These measures will ensure adequate durable liquidity in the banking system and further facilitate monetary transmission, Malhotra said.  End

 

Reported by Cassandra Carvalho and Kabir Sharma

Edited by Ashish Shirke

 

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