The Reserve Bank of India has cancelled the open market operation of bond sales of ₹10,000 crore scheduled on November 23 citing the ‘evolving liquidity condition’.
“In view of the recent market developments and based on a fresh review of the current and evolving liquidity conditions, it has been decided to withdraw the Open Market Sale Operations,” scheduled for the day, the RBI said in a statement. Surplus liquidity in the system is about ₹1 lakh crore now, compared with more than ₹2 lakh crore in early October.
Since July, the central bank has conducted nine OMOs to drain out liquidity. According dealers, RBI is not aggressively buying dollars from foreign exchange, which is also keeping the liquidity under check. Liquidity could further tighten as lending activity typically gains pace in the second half of the fiscal.