The Reserve Bank of India (RBI) on Monday announced liquidity infusion of as much as Rs. 25,000 crore via purchase of G-securities in May.
The purchase of government securities referred as open market operations (OMOs will be conducted in two equal traches and the first one is scheduled for May 2, said the apex bank.
The RBI gives the rationale for such OMOS saying that these are being undertaken "based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward". OMOs are being used by the Reserve Bank over the long period since the start of FY 19 itself due to weak liquidity conditions. And during the period it repurchased bonds worth over Rs. 2.8 lakh crore.
Also, RBI in a bid to further improve liquidity situation completed the second round of USD-INR swap action on April 23, which was successful with bids received worth USD 18.65 billion compared to RBI's promise to accept bids for USD 5 billion.
On May 2, the RBI said it will repurchase five bonds with maturity dates extending from next year to 2032.