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Informist, Friday, Feb. 27, 2026

 

--RBI bought gilts worth INR 28.15 bln via OMO in week ended Feb 20 

 

MUMBAI – The Reserve Bank of India bought government bonds worth INR 28.15 billion in the secondary market in the week ended Feb. 20, data released by the central bank Friday showed. This is after two weeks of abstaining from onscreen gilt buys. The RBI last purchased gilts worth INR 47.40 billion onscreen in the week to Jan. 30. It had purchased gilts onscreen for two consecutive weeks, purchasing gilts worth INR 126.55 billion in the week ended Jan. 23.

 

The RBI accounts for its on-screen gilt trades based on the day of settlement. Data showed the RBI bought bonds worth INR 28.15 billion on Feb. 18. The 'Others' segment of bond market participants were the largest net buyers of gilts on Feb. 17, net purchasing gilts worth INR 35.07 billion, as per data from Clearing Corp. of India. The 'Others' segment includes insurance companies, provident funds, and the RBI.

 

Most traders were not expecting the data to show any purchases by the central bank, after hopes of such purchases were dashed previously when data did not show any purchases. However, data for the week ended Friday--which is due on Mar. 6--will be closely watched, as traders speculate the central bank has been buying gilts onscreen this week. The 'Others' segment has net purchased gilts worth INR 196.03 billion in the secondary market this week, including INR 86.05 billion on Friday. Considering the RBI's display of data based on settlement, 'Others' have net bought gilts worth INR 166.61 billion between Feb. 20 and Thursday.

 

Some traders speculated that the RBI purchased gilts onscreen to offset a likely drain on rupee liquidity from a possible onshore settlement of its dollar/rupee forward contract sales in the non-deliverable forward market, dealers said. Around $7 billion of such contracts are maturing in these few days, of which $3 billion matured Wednesday, dealers in the foreign exchange market said. Others speculate that the RBI is trying to infuse liquidity and pull down bond yields. Traders speculate that the RBI bought a large quantum of the 10-year benchmark 6.48%, 2035 gilt along with the 6.33%, 2035 gilt and the 6.68%, 2040 gilt. Some of the purchases shown in 'Others' this week will have been made by insurance companies and provident funds, due to lack of sufficient long-term state bond and gilt supply to match their appetite, dealers said.  End

 

US$1 = INR 90.97

 

Reported by Cassandra Carvalho

Edited by Ashish Shirke

 

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