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Informist, Friday, Mar. 13, 2026

 

--RBI bought INR-572.10-bln gilts outside OMO auction in week to Mar 6 

 

MUMBAI – Amid a surge in crude oil prices following the outbreak of hostilities in West Asia, the Reserve Bank of India net purchased gilts worth INR 572.10 billion on-screen in the week ended Mar. 6, data released by the central bank Friday showed. This is the largest quantum of liquidity the central bank has infused in a week through open market operations outside of auctions, according to RBI data going back to November 2012. Traders had expected a figure of around INR 500 billion, terming it a "proxy OMO auction".

 

This marks the third consecutive week of on-screen purchases by the central bank, after it bought gilts worth a cumulative INR 127.15 billion in the last two weeks of February. The RBI had briefly abstained from on-screen purchases early last month after net purchasing gilts cumulatively worth INR 173.95 billion in the last two weeks of January. The RBI accounts for its on-screen gilt trades based on the day of settlement.

 

The RBI's Weekly Statistical Supplement showed the central bank purchased gilts in all trading sessions between Feb. 27 and Mar. 5, with the smallest net daily purchase of INR 90.15 billion. As per data from Clearing Corp. of India Ltd., the "Others" segment of bond market participants--which comprises the RBI, insurers, and pensions funds--net purchased gilts worth INR 559.50 billion between Feb. 27 and Mar. 5, both days inclusive. The "Others" segment was the largest net buyer of gilts in all these trading sessions and the only net buyer Mar. 5. The time period takes into account the T+1 settlement of gilts on the RBI's Negotiated Dealing System-Order Matching platform.

 

Traders have been speculating that the RBI is purchasing gilts on-screen to prevent the 10-year benchmark bond yield from sustaining a rise above the psychologically crucial 6.70% yield while simultaneously infusing liquidity to offset its dollar sales in the foreign exchange spot market. Brent crude oil futures for May delivery have jumped over 40% since Israel and America launched strikes on Iran Feb. 28, triggering the conflict, hitting nearly $120 per barrel Monday.

 

Traders have speculated that the central bank has been purchasing gilts on-screen this week, too, even as it conducted two tranches of OMO auctions totalling INR 1 trillion to purchase gilts. The "Others" segment of bond market participants had net purchased gilts worth INR 110.66 billion in the secondary market so far this week till Thursday, as per data from CCIL.  End

 

US$1 = INR 92.4550

 

Reported by Cassandra Carvalho

Edited by Rajeev Pai

 

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