RBI to conduct OMOs to inject Rs 8,000 cr on Nov 18

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RBI to conduct OMOs to inject Rs 8,000 cr on Nov 18
Hoping to stem rupee's slide and soaring bond yields amidst several issues, including the liquidity concern, the Reserve Bank of India (RBI) governor Raghuram Rajan on Wednesday said that the central bank will inject Rs 8,000 crore into the system via Open Market Operations (OMOs) on November 18.

The statement came on the backdrop of rising pressure on bond yields on speculations that the central bank might not conduct OMOs this week.

"RBI is conscious of the need to keep the system adequately supplied with liquidity, as we indicated in a statement recently, so that productive sectors are well supplied with credit," said RBI governor Rajan while addressing media on Wednesday.

Rajan said while borrowing from the MSF facility has come down substantially after the RBI extended the term repo window, market interest rates suggest some liquidity tightness.

"To alleviate this tightness, we propose to conduct OMOs. On next Monday (November 18), we will undertake an OMO for Rs. 8,000 crore," said Rajan.

Dion Global Solutions Ltd.

Story first published: Thursday, November 14, 2013, 9:10 [IST]
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