To enhance liquidity within the banking system, the Reserve Bank of India (RBI) declared on Wednesday that it will carry out open market acquisitions of government securities and USD/INR swaps, totaling around Rs 1.9 lakh crore in March.
After the successful $10 billion US dollar-rupee swap on February 28, which experienced significant demand, the central bank is implementing additional measures to maintain sufficient liquidity in the financial system.
Also Read: RBI: Reducing taxes and easing inflation to enhance consumer spending
Purchase plan for government securities
The RBI announced that it will conduct Open Market Operation (OMO) purchases of Government of India securities totaling Rs 1 lakh crore in two stages. The initial auction of Rs 50,000 crore is set for March 12, with a second Rs 50,000 crore auction planned for March 18.
USD/INR swap bidding
Furthermore, the RBI will hold a USD/INR Buy/Sell Swap auction totaling $10 billion for a tenor of 36 months on March 24. This action intends to provide long-term liquidity and stabilize foreign exchange reserves.
Also Read: Income Tax Bill 2025: Important Clarifications Regarding Special Rate Provisions
RBI’s say on this
“The Reserve Bank will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions,” the central bank said in a statement.
The central bank reiterated its dedication to overseeing liquidity and market situations, declaring that it will implement essential actions to maintain a stable financial environment. These steps demonstrate the RBI’s forward-thinking strategy to uphold financial stability in the face of changing economic circumstances.
