The RBI stated that based on the assessment of durable liquidity requirements going forward and the seasonal growth in currency in circulation in build-up to the festive season, it has decided to conduct purchase of G-secs under open market operations aggregating to Rs36,000cr in October 2018.
The news comes as a positive for the bond market as investors have been worried about rupee depreciation and rising oil prices. In addition, the government expects to adjust the lower borrowing with the expectation of increasing savings from small savings schemes where it recently raised rates by 30-40bps.
In addition, the RBI will conduct open market operations (OMO) to infuse liquidity into the system. The regular OMO purchases would keep the bond yields in a narrow range.
The RBI stated that based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, it would conduct purchase of G-secs under OMOs for an aggregate amount of Rs36,000cr in October 2018.The auctions would be conducted during the 2nd, 3rd, and 4th week of October.
The Government of India announced on Friday that it would borrow Rs70,000cr less from the market in FY18-19 to meet its fiscal deficit target of 3.3%.
The news comes as a positive for the bond market as investors have been worried about rupee depreciation and rising oil prices. In addition, the government expects to adjust the lower borrowing with the expectation of increasing savings from small savings schemes where it recently raised rates by 30-40bps.
In addition, the RBI will conduct open market operations (OMO) to infuse liquidity into the system. The regular OMO purchases would keep the bond yields in a narrow range.
The RBI stated that based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, it would conduct purchase of G-secs under OMOs for an aggregate amount of Rs36,000cr in October 2018.The auctions would be conducted during the 2nd, 3rd, and 4th week of October.
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