India: RBI to inject INR120bn liquidity on 15 Nov 18

  • The Reserve Bank on 13 Nov 18 announced it will inject INR120bn into the system through purchase of government securities on 15 Nov 18.
  • “Based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the following government securities under Open Market Operations for an aggregate amount of INR120bn on 15 Nov 18…,” it said in a statement.
  • The OMO operation will help ease tight liquidity situation triggered by series of default by group companies of IL&FS.
  • The RBI had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.
  • As part of the OMOs, the RBI will purchase government securities maturing in 2021 bearing interest rate of 8.79%, 2022 (6.84%), 2024 (8.40%), 2027 (8.24%) and 2033 (6.57%).

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