Mumbai: The Reserve Bank of India said on Tuesday that it has decided to scale up the amount of liquidity infusion by ₹ 10,000 crore to ₹ 50,000 crore this month after a review of the evolving liquidity conditions. The central bank had earlier announced to infuse liquidity amounting to ₹ 40,000 crore through the purchase of government securities under Open Market Operations (OMOs) during December. The RBI has already injected ₹ 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 ₹ 150 billion each. Consequently, the total injection of durable liquidity for the month of December 2018 would amount to ₹ 500 billion," it said in a release.
The RBI also announced to conduct the purchase of government securities under OMO for ₹ 150 billion on December 20.
The Reserve Bank further said it has decided to inject liquidity under OMOs for ₹ 50,000 crore in January 2019. The operations will be conducted through five auctions of ₹ 100 billion each.
“The liquidity conditions will continue to be monitored and depending on the assessment, 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.
This story has been published from a wire agency feed without modifications to the text.