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RBI announces special OMO of Rs 20,000 crore in 2 tranches

RBI.   | Photo Credit: File photo

The Reserve Bank of India on Tuesday said it will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for an aggregate amount of ₹20,000 crore in two tranches.

The auction will be in held in two tranches of ₹10,000 crore each and will be conducted on August 27 and September 03, 2020, Reserve Bank of India (RBI) said in a statement.

“On a review of current and evolving liquidity and market conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of government securities under OMO for an aggregate amount of ₹20,000 crores in two tranches of ₹10,000 crores each,” it said.

On August 27, the central bank said it would be selling four securities totalling ₹10,000 crore and will be purchasing four securities of the same amount.

“The securities for the second tranche auction on September 03, 2020 will be announced separately,” it added.

The Reserve Bank further said it will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly functioning of financial markets.

The simultaneous purchase and sale of government securities programme involves purchasing government securities of longer maturities and selling equal amount of securities of shorter maturities.

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Printable version | Nov 30, 2020 8:44:37 PM | https://www.thehindu.com/business/markets/rbi-announces-special-omo-of-rs-20000-cr-in-2-tranches/article32435497.ece

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