RBI to Conduct ₹1 Lakh Crore OMO Sales of Government Securities in Three Tranches
New Delhi: The Reserve Bank of India (RBI) is set to conduct open market operation (OMO) sale auctions worth a total of ₹1 lakh crore this month as it looks to manage liquidity conditions in the financial system.
The auctions will be conducted in three tranches through multi-security auctions using the multiple-price method.
The first and largest auction, worth ₹50,000 crore, is scheduled for September 17, followed by two auctions of ₹25,000 crore each on September 21 and September 28.
Six Securities to Be Offered in First Auction
For the September 17 auction, the RBI will offer six Government of India securities with maturities ranging from 2029 to 2032.
The securities include:
- 7.59% Government Security 2029, maturing on March 20, 2029
- 6.79% Government Security 2029, maturing on December 26, 2029
- 7.61% Government Security 2030, maturing on May 9, 2030
- 5.77% Government Security 2030, maturing on August 3, 2030
- 6.68% Government Security 2031, maturing on September 17, 2031
- 8.28% Government Security 2032, maturing on February 15, 2032
The RBI has set the aggregate notified amount for the first auction at ₹50,000 crore, without specifying a separate amount for each security.
The central bank has retained the flexibility to decide how much of each individual security it will sell. It may also accept bids for less than the notified amount and can sell a marginally higher or lower amount because of rounding adjustments.
As is customary for such auctions, the RBI can accept or reject bids, either fully or partially, without providing a reason.
Bids to Be Submitted Through E-Kuber
Eligible participants will be required to submit their bids electronically through the RBI’s Core Banking Solution (E-Kuber) platform between 9:30 am and 10:30 am on September 17.
Physical bids will only be considered if there is a technical failure in the electronic system. Such bids must be submitted in the prescribed format before the 10:30 am deadline.
The auction results will be announced on the same day.
Participants whose bids are accepted will need to ensure that the securities are available in their Subsidiary General Ledger (SGL) accounts by 12 noon on September 18.
Bond Market Keeps a Close Watch
The RBI’s decision to conduct OMO sales totalling ₹1 lakh crore is likely to remain closely watched by participants in the government bond market.
OMO transactions allow the central bank to influence liquidity conditions by buying or selling government securities. The latest sales come as the RBI continues to assess and manage liquidity conditions in response to developments in the financial system.
With the three auctions spread across September, market participants will be watching both the demand for the securities and the impact of the transactions on government bond yields and overall market liquidity.
News Source : Information for this article was gathered from a variety of reliable news outlets.
