This ad will auto close in 10 seconds

RBI to infuse Rs 10,000 cr through OMO on Mar 22

Last Updated: Tuesday, March 19, 2013 - 21:09

Mumbai: The Reserve Bank on Tuesday said it will infuse Rs 10,000 crore into the financial system by purchasing government securities on Friday as part of its liquidity injection measure.

"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct Open Market Operations (OMO) by purchasing government securities for an aggregate amount of Rs 10,000 crore on March 22, 2013 through multi-security auction," RBI said in a statement.

The central bank will auction four government securities with maturity in 2014, 2016, 2017 and 2026.
Reflecting tight liquidity situation, banks on Tuesday borrowed Rs 1.20 lakh crore from RBI under the repo window. On Monday, the borrowings amounted to Rs 1.42 lakh crore.

Earlier in the day, in its mid-quarter review of the monetary policy, RBI said that with government cash balances with the central bank persisting at higher than normal level, the liquidity deficit, as reflected by the net drawals by banks under the liquidity adjustment facility (LAF), has remained above the indicative comfort zone.

The reduction in the Cash Reserve Ratio (CRR) of banks by 25 basis points, effective from February 9 and open market purchases of Rs 20,000 crore since February have enabled money market rates to remain anchored to the policy repo rate.

"The Reserve Bank will continue to actively manage liquidity through various instruments, including open market operations, so as to ensure adequate flow of credit to productive sectors of the economy," it said.


First Published: Tuesday, March 19, 2013 - 21:09
comments powered by Disqus