In a bid to meet durable liquidity requirements of the financial markets, the Reserve Bank of India (RBI) has decided to infuse Rs 40,000 crore additional liquidity into the system through purchase of government securities under open market operations (OMOs) in December 2018. The central bank will detail about the auction dates for the OMOs in due course.
It added that this OMO amount is indicative with the RBI retaining the flexibility to change it, depending on the evolving liquidity and market conditions. The RBI had announced to inject Rs 40,000 crore into the system in November. It has already infused Rs 30,000 crore into the system, while the rest Rs 10,000 crore liquidity would be pumped in through auction on November 29, 2018, through multi-security auction using the multiple price method.
The central bank already, in October, injected Rs 36,000 crore into the system through OMOs. The RBI had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.
