RBI To Purchase Government Securities Worth Rs 2 Trillion To Manage Liquidity

The Reserve Bank of India has unveiled a significant liquidity management measure by approving the purchase of government securities worth Rs 2 trillion through open market operations. The purchases will be executed in four tranches, reflecting RBI’s proactive approach to balancing liquidity while maintaining financial stability.

This initiative comes at a time when bond yields have shown volatility, and liquidity conditions in the banking system require careful calibration. By conducting these purchases, RBI seeks to ease market pressures, support credit flow, and reinforce confidence among investors. Analysts believe the move will help anchor yields and provide stability to the debt market.

Key Highlights

• RBI to purchase government securities worth Rs 2 trillion in four tranches
• Objective is to manage liquidity conditions and stabilize bond yields
• Open market operations will support credit flow and investor confidence
• Measure reflects RBI’s proactive stance in maintaining financial stability
• Bond market participants expect easing of volatility following the announcement

Sources: Reuters, Business Standard, Economic Times