The Reserve Bank of India (RBI) on Thursday said it will conduct an auction on December 23 for simultaneous purchase and sale of government securities under open market operations (OMO) to infuse durable liquidity. As per the notification, the RBI will purchase 6.45 per cent of GS 2029 government bonds that will mature on October 7, 2029, for an aggregate amount of Rs 10,000 crore using the multiple price auction method.
"After reviewing the current liquidity and market scenario, the RBI has decided to conduct simultaneous purchase and sale of government securities under OMO for Rs 10,000 crore each on December 23, 2019," the central bank notified on Thursday.
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"The Reserve Bank will sell 6.65 per cent GS 2020 security (maturity date of April 9, 2020), 7.80 per cent GS 2020 (May 3, 2020), 8.27 per cent GS 2020 (June 9, 2020) and 8.12 per cent GS 2020 (December 10, 2020) for an aggregate amount of Rs 10,000 crore," the central bank notified.
The central bank clarified that it reserves the right to decide on the quantum of purchase or sale of individual securities and accept or reject any or all the bid either wholly or partially without assigning any reasons. RBI further said it has the right to accept bids for less than the aggregate amount, and purchase or sell marginally higher than the aggregate amount due to rounding-off effects.
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The eligible participants can bid or submit offers in electronic format on RBI's Core Banking Solution (E-Kuber) system between 10.30 am and 12.00 noon on December 23. The result of the auctions will be announced on the same day and successful participants should ensure availability of funds or securities by the next day, RBI said.
Edited by Chitranjan Kumar