The Reserve Bank of India (RBI) Tuesday said it would inject Rs 10,000 crore into the system through the purchase of government securities on December 6 to increase liquidity. The purchase will be made through open market operations (OMOs).
“Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the Reserve Bank has decided to conduct the purchase of … government securities under open market operations for an aggregate amount of Rs 100 billion on December 6, 2018 (Thursday),” the central bank said.
The OMO operation will help ease tight liquidity situation triggered by a series of defaults by group companies of IL&FS. The eligible participants should submit their offers in electronic format on the RBI Core Banking Solution (E-Kuber) system on December 6. The result of the auction will be announced on the same day and payment to successful participants will be made on the following day.
The RBI also announced an auction of a 12-day Government of India Cash Management Bill. The amount notified for the auction is Rs 30,000 crore.