RBI to inject Rs 10,000 cr through open market operations

The purchase will be done through multi-security auction of the government securities under open market operations (OMOs).

The Reserve Bank of India on Tuesday said it would inject Rs 10,000 crore into the system through purchase of government securities. The move in aimed to increase liquidity into the system, it said. 
 
The purchase will be done through multi-security auction of the government securities under open market operations (OMOs).
 
In a statement, the central bank said, "Based on an assessment of prevailing liquidity conditions and also of durable liquidity needs going forward, the RBI has decided to conduct purchase of ... Government securities under OMOs for an aggregate amount of Rs 100 billion on January 17, 2019".
 
It asked the eligible participants to submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.
 
"Only in the event of system failure, physical offers would be accepted," it clarified.
 
Such physical offer should be submitted to Financial Markets Operations department in the prescribed form obtainable from RBI website, it stated. 
 
The result of the auction will be announced on the same day and payment to successful participants will be made on the following day.
 
The statement says, "RBI reserves the right to decide on the quantum of purchase of individual securities, accept offers for less than the aggregate amount of ₹100 billion, purchase marginally higher than the aggregate amount due to rounding-off effects, and accept or reject any or all the offers either wholly or partially without assigning any reason."
 
The RBI plans to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The central bank has so far injected Rs 20,000 through OMOs in January.

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