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    Default RBI to infuse Rs 10,000 cr into market on Oct 7 to ease liquidity

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    The Reserve Bank of India (RBI) will infuse Rs 10,000 crore on October 7 by purchasing government securities, to ease liquidity in the market.

    "Based on the assessment of prevailing and evolving market conditions, the central bank has decided to conduct open market operations (OMOs) by purchasing government securities for an aggregate amount of Rs 10,000 crore on October 7," the RBI said in a release.

    OMOs refer to the sale or purchase of government securities with the objective of adjusting rupee liquidity conditions in the market.

    If there is excess liquidity, RBI resorts to the sale of securities to suck out liquidity. When liquidity conditions are tight, the central bank buys securities, thereby releasing liquidity into the market.

    The RBI will buy government securities maturing in 2015 (bearing interest rate of 7.17 per cent), 2016 (7.59 per cent), 2022 (8.15 per cent) and 2025 (8.2 per cent).

 

 

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