The Reserve Bank will buy government bonds worth Rs 15,000 crore through open market operations (OMO) next week in order to infuse liquidity.
This is the second OMO within a week to infuse liquidity in cash starved banking system. RBI yesterday bought government securities of Rs 15,000 crore.
Based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct purchase of government securities under Open Market Operations for an aggregate amount of Rs 150 billion on May 31, the central bank said in a statement today.
There is an overall aggregate ceiling of Rs 150 billion for all the securities in the basket put together.
Purchase of security would help in release similar amount of money in the market and ease liquidity condition. RBI further said it can purchase marginally higher than the aggregate amount due to rounding-off effects and other relevant factors.
RBI can accept or reject any or all of the offers either wholly or partially without assigning any reason, it said. The result of the auction will be announced on the same day and payment to successful participants will be made on May 31.