RBI Injects ₹50,000 Crore Into Banking System Through OMO Purchase of G-Secs
MUMBAI: The Reserve Bank of India (RBI) on Monday injected ₹50,000 crore of durable liquidity into the banking system through an Open Market Operation (OMO) purchase auction of Government of India securities, as part of its broader plan to ease tightening liquidity conditions.
The move comes at a time when system liquidity has slipped into deficit due to large outflows linked to advance tax payments and Goods and Services Tax (GST) collections, prompting the central bank to step in with targeted measures.
Breakdown: Securities Purchased in Today’s OMO Auction
According to an RBI release, the central bank purchased government bonds across multiple maturities, with the following accepted amounts:
- ₹10,320 crore of 6.79% GS 2029
- ₹13,733 crore of 7.61% GS 2030
- ₹9,443 crore of 7.26% GS 2033
- ₹7,253 crore of 6.79% GS 2034
- ₹5,505 crore of 6.67% GS 2035
- ₹3,746 crore of 7.30% GS 2053
However, the RBI did not accept any bids for 7.18% GS 2037, indicating either limited bidding interest or yields offered by participants being outside RBI’s acceptable range.
Why RBI Is Injecting Liquidity Now
The banking system had moved into liquidity deficit following a sharp drain triggered by:
1) Advance tax payments
Corporates typically withdraw large sums from banks near statutory tax deadlines.
2) GST payments
GST-related remittances also add to short-term liquidity compression.
As of the latest update, system liquidity was estimated at a deficit of around ₹62,301.77 crore, reflecting a tighter cash position in the interbank market.
RBI’s Bigger Plan: ₹2 Lakh Crore OMO Purchases in Four Tranches
Today’s ₹50,000 crore purchase is the first tranche of a larger RBI liquidity support programme announced on December 23. The central bank said it will conduct ₹2 lakh crore OMO purchases in four equal tranches of ₹50,000 crore each:
Schedule of upcoming OMO auctions
- December 29, 2025 – ₹50,000 crore ✅ (completed)
- January 05, 2026 – ₹50,000 crore
- January 12, 2026 – ₹50,000 crore
- January 22, 2026 – ₹50,000 crore
These operations are aimed at ensuring orderly liquidity conditions and improving the transmission of monetary policy through stable funding and lower market volatility.
USD/INR Swap Auction Also Announced: $10 Billion for 3 Years
In addition to bond purchases, RBI will conduct a USD/INR Buy/Sell swap auction of $10 billion for a 3-year tenor, scheduled for January 13, 2026.
This swap is expected to inject rupee liquidity while absorbing excess dollar liquidity, especially as forward premiums in the currency market have remained elevated due to year-end dollar flows.
Market Impact: What This Could Mean
1. Bond market support
Analysts expect RBI’s bond-buying programme to sustain a rally in government securities and keep yields under pressure, which benefits borrowing costs across the economy.
2. Lower funding stress for banks
Banks facing tight liquidity generally see higher short-term rates. RBI’s durable injection helps moderate those conditions.
3. Positive signal for rate expectations
Economists believe that improved liquidity sentiment could help create conditions supportive of future policy easing, if inflation and growth align.
Context: RBI’s Intervention Comes Amid Tight Conditions
The Reuters report noted that RBI’s combined plan—including bond purchases and the dollar swap—adds up to around ₹2.90 trillion (≈$32 billion) in liquidity measures, aimed at stabilising market conditions and supporting policy transmission.
What to Watch Next
January 05 OMO auction – next ₹50,000 crore tranche
January 13 dollar swap auction – major FX-linked liquidity operation
System liquidity deficit trend – whether RBI’s actions shift liquidity into surplus
