RBI to infuse Rs. 36,000 cr. to ease liquidity

The Reserve Bank of India (RBI) has decided to infuse Rs. 36,000 through open market purchase of bonds in October as liquidity has tightened due to an uptick in loan demand in the festive season.

“Based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, RBI has decided to conduct purchase of Government securities under Open Market Operations (OMOs) for an aggregate amount of Rs. 360 billion in the month of October 2018,” RBI said adding that the auctions would be conducted during the second, third and fourth week of October. Last week, RBI had reassured the financial markets that it stands ready to meet the liquidity requirements of the system.

“The OMO amount stated above is indicative and RBI retains the flexibility to change it, depending on the evolving liquidity and market conditions,” the central bank said.