Context:
The Reserve Bank of India’s first open market operation (OMO) purchase for FY26 drew strong demand, with bids totaling ₹80,820 crore, four times the notified amount of ₹20,000 crore. The RBI has also decided to skip the 14-day main variable rate repo (VRR) operation for April 4–17, citing improved liquidity.
Key Highlights
- Total Bids Received: ₹80,820 crore
- Notified Amount: ₹20,000 crore
- Highest Acceptance: ₹6,660 crore for the 8.24% GS 2033 bond
- Market Trend: Bonds were offered at closer-to-market prices, unlike earlier discounted OMOs
- Expert Insight: Institutions bid aggressively; dealers likely to book profits
Liquidity and Repo Operations
- Liquidity Shift: Banking liquidity moved into a mild surplus from March 29
- 14-day VRR: Cancelled due to improved conditions
- February VRRs: ₹1.25 lakh crore infused earlier will mature Friday, creating liquidity demand
- Economist View: Sustainable transmission needs ₹1–2 lakh crore in surplus liquidity
Upcoming Plans
- RBI has announced three more OMO purchases of ₹20,000 crore each
- The first government securities auction of FY26 is scheduled for Friday with ₹30,000 crore in 10-year G-secs
Bond Market Movement
- 10-year G-sec yield: Closed at 6.50%, down 2 basis points
- Market participants expect future OMO prices to align with current market levels rather than at a discount
