The Reserve Bank of India (RBI) on Thursday said that it has decided to conduct simultaneous purchase and sale of government securities under open market operations (OMO) for Rs 10,000 crore each on April 27. The purchase and sale of securities will be done on a review of current and evolving liquidity and market conditions, RBI said in a statement. The central bank will purchase long-dated securities maturing 2026, 2028, 2029 and 2030, worth Rs 10,000 crore using the multiple price auction method. The RBI will simultaneously sell short-dated securities maturing June 2020, October 2020 and April 2021, aggregating Rs 10,000 crore using the same method.
The RBI also said that there will be no security-wise notified amount and the result of the auctions will be announced on the same day. The central bank reserves the right to "decide on the quantum of purchase/sale of individual securities., accept bids/offers for less than the aggregate amount, purchase/sell marginally higher/lower than the aggregate amount due to rounding-off, accept or reject any or all the bid/offers either wholly or partially without assigning any reasons."
Meanwhile, the RBI conducted two OMO purchase auctions aggregating Rs 30,000 crore in two tranches in March to boost liquidity in the market.The first tranche of purchase auction was worth Rs 15,000 crore. The second tranche of purchase of government securities received a robust response from the market. The central bank received bids for Rs 39,529 crore