RBI’s Big Buy: Inside the ₹200 Billion Bond Move and What It Means for Your Money

• OMO Bond Purchases: RBI purchased ₹200 billion (₹20,000 crore) of government securities under its Open Market Operation (OMO) up to April 30, 2025. This is a part of a larger liquidity management strategy, with RBI carrying out several OMO auctions during April to infuse adequate liquidity in the banking system. These operations have helped bring about a significant turnaround in systemic liquidity, from a deficit in early 2025 to a surplus in April.
• Forex Reserves: India's foreign exchange reserves were at $686.06 billion as of May 2, 2025, compared with $688.13 billion the week before. The decline comes after an eight-week high in rising reserves, which are still below the record high of $704.89 billion seen in September 2024. The movement is due to fluctuations in foreign currency assets, gold reserves, and other items in the reserve basket.
• Government Loan Position: As of May 2, 2025, the RBI said that there were no federal government loans with the central bank outstanding. This follows a new pattern of government cash balances not requiring recourse to RBI advances, and state government loans were lower than in previous times.
• Liquidity Trends: Systemic liquidity improved significantly in April 2025, aided by RBI’s OMO purchases, forex swaps, and capital inflows, reversing the deficit conditions seen in the previous quarter.

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