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.
