May 25, 2019
Mumbai: To ease liquidity concerns, the Reserve Bank of India (RBI) on Friday said that it will inject Rs 15,000 crore through open market operations (OMOs) on June 13.
Open market operations (OMOs) are conducted by the RBI by sale or purchase of government securities (g-secs) to regulate money supply in the market.
The sale or buying of g-secs infuses or reduces liquidity. OMOs like repo rate, cash reserve ratio and statutory liquidity ratio are monetary policy tools to balance inflation.
“Based on a review of the evolving liquidity conditions and assessment of the durable liquidity needs going forward, the RBI has decided to conduct purchase of government securities under OMO for Rs 150 billion on June 13, 2019,” the apex bank said in a statement.
The financial sector has been facing liquidity crunch ever since the Infrastructure Leasing and Financial Services Ltd (IL&FS) defaulted in its payment obligations, triggering reluctance among lenders to lend to the Non Banking Financial Company (NBFC) sector.
IANS
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