The Reserve Bank of India, in a bid to boost liquidity in the market, will purchase bonds worth Rs.36,000 crore this month. According to a report by Bloomberg Quint, the RBI will infuse a sum of Rs.36,000 crore into the economy through planned bond purchases.
According to a press release, the RBI will purchase government securities under OMO (Open Market Operations) in the month. These operations would be conducted in the second, third, and fourth week of this month, with the total cost of these operations being around Rs.36,000 crore.
The Reserve Bank of India typically resorts to OMOs to control liquidity in the economy. In cases where the liquidity is high, the RBI sells its securities, thereby draining money from the market. In cases of low liquidity it buys securities from the market, thereby infusing money into it.
With the festive season around the corner this move is likely to provide sufficient money in the market. While no date has been set for the auctions, this is likely to be announced soon.
Sources: Bloomberg Quint, Money Control
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