RBI to inject ₹1 lakh crore via OMOs, conduct $10B forex swap to fix India’s liquidity crunch

The Reserve Bank of India (RBI) has announced a series of operations aimed at managing the current and evolving liquidity conditions in the banking system.In a press release issued on Wednesday, the central bank revealed it would conduct two Open Market Operations (OMO) purchase auctions of Government of India securities for a total amount of ₹1,00,000 crore. The auctions will be held in two tranches: ₹50,000 crore on March 12, 2025, and another ₹50,000 crore on March 18, 2025.Additionally, the RBI will conduct a USD/INR Buy/Sell Swap auction for ₹10 billion with a tenor of 36 months. This auction is scheduled for March 24, 2025.The Indian banking system is grappling with its worst liquidity crunch in over a decade, with system liquidity shifting from a surplus of ₹1.35 lakh crore in November to a deficit of ₹0.65 lakh crore in December. This worsened further, reaching a ₹2.07 lakh crore deficit in January and ₹1.59 lakh crore in February.The RBI emphasised that detailed instructions for each of these operations will be issued separately. The central bank reiterated that it will continue to closely monitor liquidity and market conditions and take necessary actions to ensure stability and orderly liquidity management.First Published: Mar 5, 2025 7:48 PM IST

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