New Delhi: The Reserve Bank of India (RBI) on Tuesday announced a series of measures, including a Rs 1 lakh crore purchase of government bonds and a $10 billion dollar-rupee swap, to inject liquidity into the banking system.
In a statement, the central bank said it will conduct Open Market Operations (OMO) to buy central government securities in two tranches of Rs 50,000 crore each, scheduled for January 29 and February 5. These purchases will help increase the availability of funds with banks and support smooth functioning of the financial system.
Earlier, the RBI had indicated that the bond purchase auctions would be held on February 5 and February 12, but the dates have now been advanced.
Separately, the RBI said it will conduct a USD-INR buy-sell swap auction worth $10 billion on February 4 for a three-year tenor. Under this mechanism, banks will sell US dollars to the RBI and simultaneously agree to buy back the same amount of dollars at the end of the swap period.
The dollar-rupee swap is aimed at infusing long-term rupee liquidity into the system while managing foreign exchange flows. Together, the measures are expected to ease liquidity conditions and support credit growth in the economy.
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