Reserve Bank of India (RBI) has announced a series of measures to address liquidity conditions in the banking system. It plans to conduct Open Market Operations (OMO) purchase auctions of Government of India securities amounting to ₹60,000 crore in three tranches of ₹20,000 crore each, scheduled for January 30, February 13, and February 20, 2025. Additionally, a 56-day Variable Rate Repo (VRR) auction for ₹50,000 crore will take place on February 7, 2025. To address currency liquidity, the RBI will also conduct a USD/INR Buy/Sell Swap auction of USD 5 billion for a six-month tenor on January 31, 2025.
The RBI stated that detailed guidelines for each operation will be issued separately. It emphasized that it will continuously monitor liquidity and market conditions, implementing further measures if necessary to maintain orderly liquidity management. These initiatives are aimed at stabilizing financial markets and ensuring adequate liquidity to meet economic demands.
Reserve Bank of India
RBI announces measures to manage liquidity conditions
On a review of current liquidity and financial conditions, the Reserve Bank has decided to conduct the following operations to inject liquidity into the banking system:
a. OMO purchase auctions of Government of India securities for an aggregate amount of ₹60,000 crore in three tranches of ₹20,000 crore each to be held on January 30, 2025, February 13, 2025, and February 20, 2025
b. 56-day Variable Rate Repo (VRR) auction for a notified amount of ₹50,000 crore to be held on February 7, 2025
c. USD/INR Buy/Sell Swap auction of USD 5 billion for a tenor of six months to be held on January 31, 2025
2. Detailed instructions for each operation shall be issued separately.
3. The Reserve Bank will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions.
(Puneet Pancholy)
Chief General Manager
Press Release: 2024-2025/2013
