RBI to infuse Rs 50,000 cr liquidity this month

The Reserve Bank of India (RBI) said Tuesday it has decided to scale up the amount of liquidity infusion by Rs 10,000 crore to Rs 50,000 crore this month after a review of the evolving liquidity conditions.

The central bank had earlier announced to infuse liquidity amounting to Rs 40,000 crore through the purchase of government securities under Open Market Operations (OMOs) during December.

RBI has already injected Rs 20,000 crore through two OMO purchase auctions.

“On a review of the evolving liquidity conditions, it has been decided to scale up the amounts to be purchased in the remaining two OMO auctions scheduled in December 2018 to Rs 150 billion each. Consequently, the total injection of durable liquidity for the month of December 2018 would amount to Rs 500 billion,” it said in a release.

RBI also announced to conduct the purchase of government securities under OMO for Rs 150 billion on December 20.

RBI said it has decided to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The operations will be conducted through five auctions of Rs 100 billion each. 

“RBI will consider similar quantum of OMO purchases until the end of March 2019,” it added.

It further said the exact calibration of the quantum of OMO would depend on sustained changes in the behaviour of currency in circulation, the magnitude of sterilisation operations for RBI's forex operations and other relevant factors.