In a bid to inject liquidity into the banking system, the Reserve Bank of India (RBI) announced on Wednesday that it will conduct open market purchases of government securities and USD/INR swaps, amounting to approximately Rs 1.9 lakh crore in March.
Following its successful $10 billion US dollar-rupee swap on February 28, which saw strong demand, the central bank is taking further steps to ensure adequate liquidity in the financial system.
Government securities purchase plan
The RBI stated that it will carry out Open Market Operation (OMO) purchases of Government of India securities worth Rs 1 lakh crore in two phases. The first auction of Rs 50,000 crore is scheduled for March 12, followed by another Rs 50,000 crore auction on March 18.
USD/INR swap auction
Additionally, the RBI will conduct a USD/INR Buy/Sell Swap auction worth $10 billion for a 36-month tenor on March 24. This move aims to inject long-term liquidity and stabilize forex reserves.
The central bank reaffirmed its commitment to monitoring liquidity and market conditions, stating that it will take necessary measures to ensure an orderly financial environment. These actions reflect the RBI’s proactive approach to maintaining financial stability amid evolving economic conditions.
(With PTI inputs)
