RBI’s Rs 50,000 crore OMO sale gets bids worth Rs 66,590 crore
The Reserve Bank of India's open market operation sale received robust investor interest. This operation aimed to absorb surplus liquidity from the banking system. The central bank accepted bonds at yields higher than prevailing market rates. This move precedes a significant weekly bond auction scheduled for Friday. Further liquidity absorption measures are planned for the coming week.
Mumbai, September 16 - The Reserve Bank of India (RBI) recently conducted its first open market operation (OMO) sale of the year, receiving bids worth ₹66,590 crore against the announced ₹50,000 crore. The RBI purchased bonds at yields surpassing current market levels, aiming to remove surplus liquidity from the banking system. Higher yields indicate that investors demanded a premium for the securities.
This OMO precedes a ₹28,000 crore weekly bond auction scheduled for September 21. The 8.28% GS 2032 bond saw the highest demand, with market participants placing bids amounting to ₹19,700 crore, while the five-year 6.68% GS 2031 paper received bids totaling ₹7,970 crore. The yields were marginally above market expectations; nonetheless, the OMO was fully subscribed, leading to no significant impact on yields.
Treasury head at CSB Bank, Alok Singh, commented on the successful subscription. The RBI's OMOs are employed to absorb excess liquidity and align the weighted average call rate (WACR) with the policy rate.
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