Open Market Operations (OMO): RBI Buys ₹50,000 Crore G-Secs to Inject Liquidity

Context

RBI conducted open market operations (OMO) to buy ₹50,000 crore of government securities to ease liquidity pressures amid global uncertainty.

Open Market Operations (OMO)

• RBI buys/sells government securities to manage liquidity and interest rates.
• Purchase → injects liquidity; sale → absorbs liquidity.
• Used to offset tight liquidity (e.g., advance tax outflows) and support credit flow.

Government Securities (G-Secs)

• Borrowing instruments issued by Government of India.

Two main types:

• Treasury Bills (T-Bills)
Short-term; issued for 91, 182 and 364 days; sold at discount and redeemed at face value.

• Dated Securities (G-Secs)
Long-term; maturity from 5 to 40 years; carry fixed/float interest (coupon).

• Considered sovereign-backed, low-risk assets; widely held by banks and used in RBI operations.

Key Points

• RBI planned OMOs of ₹1 lakh crore in two tranches (₹50,000 crore each).
• Aim: inject liquidity and stabilise financial conditions.
• Earlier OMOs: ₹2 lakh crore (Dec 2025–Jan 2026); ₹1.25 lakh crore (May 2025).
• Rupee briefly hit 92.36 per US$ due to West Asia tensions and rising crude; later steadied near 92.21 per US$ after intervention.

Petrol Prices in India: Government Signals No Immediate Hike Despite $100 Crude

Context

The government indicated petrol prices will not rise immediately despite crude crossing $100 per barrel, as oil companies and tax adjustments can absorb shocks.

1. How Petrol & Diesel Prices Are Decided

• Linked to global crude price + rupee–dollar rate + refining and transport cost.
• Revised daily by oil marketing companies (Indian Oil, BPCL, HPCL).

2. Role of Taxes

Central Excise Duty (Centre)
• Fixed per litre (specific tax).
• Government reduces or increases it to manage inflation.

State VAT (States)
• Charged as percentage of base price plus excise.
• Petrol ~20–35%, Diesel ~15–25% (varies by state).

3. GST Status

• Petrol, diesel, crude oil, ATF and natural gas are outside GST.
• Taxed under excise plus VAT system; GST shift needs Council approval.

4. Current Situation

• Brent crude rose above $100 (peaked near $119).
• Government signalled no immediate retail hike.
• LPG refill booking gap raised to 25 days to prevent hoarding

Supreme Leader of Iran: Mojtaba Khamenei Appointed After Death of Ali Khamenei

Context

Iran’s Assembly of Experts appointed Ayatollah Mojtaba Khamenei as the third Supreme Leader after the killing of Ayatollah Ali Khamenei in U.S.–Israeli strikes.

Important Points

• The Supreme Leader is Iran’s most powerful authority — head of state and commander-in-chief of armed forces, above the elected President.
• Mojtaba Khamenei (57), son of Ali Khamenei, becomes the third Supreme Leader after Ruhollah Khomeini and Ali Khamenei.
• Chosen by the 88-member clerical Assembly of Experts, constitutionally empowered to appoint or remove the Supreme Leader.
• Known for close ties with the Islamic Revolutionary Guard Corps (IRGC) and clerical establishment; linked with Iran’s “Axis of Resistance.”
• Russia and China backed the selection; the U.S. signalled conditional acceptance amid tensions.