OMO gets poor response from investors on Monday

OMO gets poor response from investors on Monday

Mumbai: The open market operation (OMO), through which the Reserve Bank of India (RBI) buys securities from the secondary market to infuse liquidity in the system, got a poor response from investors on Monday with sale of Rs2148.29 crore worth of securities. RBI was willing to buy bonds up to Rs12,000 crorer. Banks borrowed Rs89,960 crore of overnight money from the central bank to tide over their asset-liability mismatches. The banking system is witnessing a shortage of liquidity in the last few weeks. The RBI organized the bond-buyback to help banks with some liquidity. However, the bonds offered to be bought back were maturing as early as December, which deterred the bond dealers from offering the securities to RBI, according to bond dealers.

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