Economy Boost: RBI to organize Rs 10,000 crore special OMO on February 25

New Delhi: To ensure liquidity in the system, the Reserve Bank of India (RBI) will conduct the purchase and sale of government securities under Open Market Operations (OMO) to collect Rs 10,000 crore in each market on 25 February.

The central bank will buy and sell government securities through a multiple-price auction method.

RBI said, “On a review of the current liquidity and financial conditions, the Reserve Bank decided on February 25, 2021 to conduct the purchase and sale of government securities under open market operations for a total amount of Rs 10,000 crore each. On February 10, the central bank had purchased bonds worth Rs 20,000 crore through OMOs.

RBI Governor Shaktikanta Das said in his address after a meeting of the Monetary Policy Committee on 5 February that the central bank would maintain an ‘adjustment liquidity stance’ to support growth in the economy battered by the Kovid-19 epidemic.

He said that the market operation of the RBI due to the epidemic has overcome fears of confusion and influenced the perception of the financial market. On the government’s market debt, Das said, the central bank would ‘sort out’ the Rs 12 lakh crore loan program in a non-disruptive manner.

The government raises money from the market through bonds and treasury bills to meet its fiscal deficit. Finance Minister Nirmala Sitharaman, in her budget speech, pegged India’s fiscal deficit at 6.8 percent of GDP in FY 2021-22, from 9.5 percent in 2020-21.

(With agency inputs)