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RBI announces to buy govt securities worth Rs. 20,000 via open market operations on February 10

IBEF:  February 09, 2021

Under Open Market Operations (OMO), the Reserve Bank of India (RBI) has announced to buy government securities worth Rs. 20,000 crore (US$ 2.75 billion).

On Monday, the bank said in a statement, “The Reserve Bank has therefore agreed to buy government securities under Open Market Operations (OMO) for an aggregate amount of Rs. 20,000 crore (US$ 2.75 billion) on Feb 10, 2021, following a review of the existing liquidity and financial conditions.”

As per the statement, on the Reserve Bank of India Core Banking Solution (E-Kuber) platform between 10:00 am and 11:00 am on February 10, 2021, eligible participants should submit their bids in digital form. Only in the case of machine failure will physical bids be approved. Such physical bids should be submitted to the Financial Markets Operations Department.

'The auction results will be announced on the same day and active participants can ensure the availability of securities in their SGL account by 12 noon on February 11, 2021.

After the government confirmed its borrowing strategy, the yield on 10-year bonds surged last week. Nevertheless, at the time of filing this copy, it had eased to 6.031% from the previous close of 6.071%.

On Friday, RBI Governor Mr. Shaktikanta Das ensured investors that its liquidity stance remained accommodative and that the government's Rs. 12.06 trillion (US$ 165.60 billion) loan programme would be handled smoothly and orderly for the fiscal year beginning in April 2021.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.