RBI to buy govt bonds worth Rs 40,000 crore on April 17

The move aims to manage evolving liquidity conditions in the financial system, the central bank said in an official statement.

This bond purchase will be in addition to the Rs 80,000 crore worth of government securities already announced on April 1, which is being conducted in four equal tranches of Rs 20,000 crore each on April 3, 8, 22, and 29.

"In a review of current and evolving liquidity conditions, the Reserve Bank has decided to conduct an OMO purchase auction of Central Government’s securities for an aggregate amount of Rs 40,000 crore to be held on April 17" the RBI stated.

The central bank will purchase multiple government securities through a multi-security auction using the multiple price method.

The bonds include those maturing between 2028 and 2039, such as the 7.37 per cent GS 2028, 7.32 per cent GS 2030, 6.54 per cent GS 2032, and 7.18 per cent GS 2033, among others.

However, the RBI clarified that there is no security-wise notified amount and reserves the right to decide on the quantum of purchase of each security.

Participants can submit their bids electronically via the RBI’s E-Kuber platform from 9:30 am to 10:30 am on the auction day. In case of any system failure, physical bids will also be accepted.

The results of the auction will be announced on the same day, and successful participants must ensure the availability of securities in their SGL account by 12 noon on April 21.

Reiterating its commitment to maintain financial stability, the RBI said it would continue to monitor liquidity and market conditions closely and take necessary measures to ensure smooth liquidity in the system.