RBI announces OMO purchase of state government securities on Dec 23
Dec 18, 2020
Mumbai (Maharashtra) [India], December 18 : The Reserve Bank of India (RBI) has decided to conduct another purchase auction of state developments loans (SDLs) under open market operations (OMOs) for an aggregate amount of Rs 10,000 crore on December 23.
Earlier, the central bank conducted two OMOs in SDLs covering all states and union territories for a cumulative amount of Rs 20,000 crore.
The RBI will purchase the SDLs through a multi-security auction using the multiple price method. There is no security-wise notified amount.
Eligible participants should submit their bids in electronic format on RBI's core banking solution (E-Kuber) system between 10 and 11 am on December 23.
The result will be announced on the same day and successful participants should ensure availability of the requisite amount of securities in their SGL account by noon on December 24.
With the heightening of COVID-19 pandemic risks, certain financial market segments have been experiencing a tightening of financial conditions as reflected in the hardening of yields and widening of spreads.
The central bank has been constantly reviewing current and evolving liquidity and market conditions.
