RBI doubles OMO purchase to ₹40,000 crore for Feb 13 to boost liquidity

The Reserve Bank of India (RBI) on Monday announced it will double the size of its open market operation (OMO) purchase to ₹40,000 crore for February 13, up from the ₹20,000 crore announced earlier. The move aims to ease the persistent liquidity deficit in the banking system.

“On a review of current and evolving liquidity conditions, the aggregate amount of OMO purchase has now been revised to ₹40,000 crore,” the apex bank’s notification read.

Eligible participants must submit bids electronically via the RBI’s E-Kuber system between 10:30 am and 11:30 am on February 13, 2025.

In case of system failure, physical bids will be accepted at the Financial Markets Operation Department, with details available on the RBI website.

Auction results will be announced the same day, and successful participants must ensure securities are available in their SGL (Subsidiary General Ledger) account by 12 noon on February 14, 2025.

Additionally, the RBI has set the notified amount for its daily Variable Rate Repo (VRR) auction at ₹2 lakh crore on February 11.

This comes as the banking system faces a liquidity shortfall of ₹1.33 lakh crore as of February 7, marking eight consecutive weeks of deficit, according to Reuters.

Also read: RBI repo rate cut: Which banks may benefit the most and why

Last week, banks bid for twice the notified amount at the RBI’s 56-day VRR auction. The central bank has already infused over ₹1 lakh crore through bond purchases and dollar/rupee swaps, along with an additional ₹50,000 crore via a 56-day repo auction.

The RBI had recently cut its key interest rate by 25 basis points but did not announce any liquidity-enhancing measures, leading to a rise in bond yields.

Governor Sanjay Malhotra reaffirmed that the RBI will continue to monitor liquidity conditions and take necessary steps to ensure stability in financial markets.