RBI's outright OMO sales touch Rs. 8,385 crore in September
In September, the Reserve Bank of India (RBI) executed open market operation (OMO) sales of government securities totaling Rs. 8,385 crore. The largest sale of government securities through OMO took place on September 15, reaching Rs. 1,720 crore, followed by Rs. 815 crore on September 21 and Rs. 775 crore on September 25. The RBI Bulletin is a monthly report that offers insights into the domestic and global economic landscape.
OMO sales in October despite liquidity deficit
RBI conducted OMO sales of government securities amounting to Rs. 4,175 crore between October 16-20, even though the banking system's liquidity was in deficit during that week. The RBI's Weekly Statistical Supplement data indicated that the central bank sold government securities via OMO worth Rs. 920 crore on October 16, Rs. 1,050 crore on October 17, and Rs. 1,425 crore on October 18. This was followed by Rs. 230 crore and Rs. 550 crore, on October 19 and 20, respectively.
RBI Governor's stance on OMO sales
At the monetary policy review meeting on October 6, RBI Governor Shaktikanta Das mentioned that the central bank might need to contemplate OMO sales to manage liquidity. His remarks were made during a period when the banking system's liquidity was in deficit and no immediate inflows were anticipated. OMOs involve buying/selling of government securities in the open market by RBI, resulting in a decrease in bond prices and increase in yields, as bond prices and yields have an inverse relationship.
