RBI bought INR 100 mln of gilts outside OMO auction in week to Mar 20
This story was originally published at 20:02 IST on 27 March 2026
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--RBI bought INR-100-mln gilts outside OMO auction in wk to Mar 20
MUMBAI – The Reserve Bank of India net purchased gilts worth INR 100 million in the secondary market in the week ended Mar. 20, marking the fifth consecutive week of purchases, data released by the central bank Friday showed. The RBI's on-screen purchases have fallen significantly this week, down from last week's INR 195.30 billion. The pace of purchases had been robust over the four weeks ended Mar. 13, when the central bank had net purchased gilts worth INR 894.55 billion on-screen.
The central bank refrained from intervening in the market despite the rupee falling to record lows and crude oil prices hovering around the $100-$110 per barrel range amid the war in West Asia. This suggests the central bank is allowing bond yields to rise to align with evolving conditions stemming from the war, dealers said. The 10-year government bond, which rose 6 basis points to 6.74% in the week to Mar. 20, has since risen to a 20-month high of 6.94% Friday.
The RBI accounts for its on-screen gilt trades based on the day of settlement. 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 20.09 billion in a holiday-shortened week between Mar. 13 and Mar. 18, both days inclusive. Money markets were shut Mar. 19. This is sharply lower than the buys worth 218.34 billion from the 'others' category in the Mar. 6-12 period.
The minuscule purchases were in line with activity in prior quarters, when it bought a token amount of gilts in the secondary market towards the end of the June, September and December quarters. In addition to the on-screen purchases, the data showed the RBI infused INR 500 billion of liquidity on Mar. 16. This corresponded to the settlement of the RBI's auction to buy gilts on Mar. 13. So far in 2025-26 (Apr-Mar), the central bank has infused durable liquidity worth INR 8.78 trillion through auctions and on-screen purchases.
The 'others' segment net purchased gilts worth INR 44.13 billion between Mar. 20 and Wednesday, with Friday's data yet to be released. Money markets were shut Thursday for Ram Navami. Most dealers do not expect the data released next week to show RBI purchases in the secondary market for the week to Mar. 27. However, some traders speculated that the RBI stepped in near the end of trading sessions to purchase gilts on-screen this week. Without any RBI purchases, dealers expect the 10-year benchmark gilt yield to further rise up to 7% in the coming week. End
Reported by Diksha Tripathy
Edited by Saji George Titus
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