Key Highlights
- The Reserve Bank of India (RBI) conducted its fifth open market operation (OMO) purchase in 2025.
- RBI accepted ₹44,541 crore of bids, against the notified amount of ₹50,000 crore.
- Bids worth ₹67,540 crore were received in this round of auctions.
Liquidity Deficit
- The banking system has been in liquidity deficit since mid-December 2024.
- The daily average liquidity shortfall in March stood at ₹1.62 lakh crore.
- The RBI’s liquidity-enhancement measures include:
- ₹2 lakh crore injected via OMO auctions (till March 2025, excluding this latest auction).
- $15 billion infused through foreign exchange swaps.
- Economists anticipate liquidity easing post-April 2025, supported by higher government spending at the start of the new fiscal year.
Lower Acceptance in the Latest OMO
- This is the only OMO in the current drive where RBI accepted bids lower than the notified amount.
- According to Rajeev Pawar, Head of Treasury at Ujjivan Small Finance Bank: “I think the pricing by banks may have been higher than the RBI’s comfort due to which some amount wasn’t accepted.”
Demand and Auction Details
- The OMO auction included 6 securities maturing between 2029 and 2037.
- The 7.26% GS 2033 security saw the highest demand.
- Pawar added: “The appetite to sell from the held-to-maturity book of banks seems satisfactory.”
Outlook for FY26
- Market experts expect more OMO purchases in the next fiscal year.
- Liquidity easing will depend on:
- RBI’s future measures.
- Acceleration in government spending as the fiscal year progresses.
The RBI continues to manage liquidity challenges through calibrated interventions. The latest OMO reflects cautious acceptance levels, aligning with the central bank’s pricing comfort. Market participants anticipate sustained OMOs and stronger liquidity conditions in the upcoming fiscal year.
Source: The Economic Times
