RBI To Infuse Rs 1.25 Tn Via Bond Purchases In May To Ease Liquidity

(MENAFN- KNN India) New Delhi, Apr 29 (KNN) The Reserve Bank of India announced on Monday plans to purchase government bonds worth 1.25 trillion rupees through open market operations across four tranches in May, continuing its efforts to enhance liquidity in the banking system.

The central bank will conduct the first tranche of 50,000 crore rupees on May 6, with three subsequent tranches of 25,000 crore rupees each scheduled for May 9, 15, and 19.

This follows the RBI's significant liquidity injection of 1.2 trillion rupees in April through debt purchases and foreign exchange swaps. The final tranche for April, totalling 20,000 crore rupees, is set for Tuesday.

This initiative comes after the RBI reduced its repo rate for the second consecutive time and shifted to an 'accommodative' stance earlier this month, signalling its commitment to supporting economic growth.

In a press conference following the April 9 monetary policy decision, RBI Governor Sanjay Malhotra indicated that the central bank aims to maintain sufficient surplus in the banking system to ensure effective policy transmission.

The target surplus level is approximately 1 per cent of deposits, which translates to between 2.20 trillion and 2.50 trillion rupees.

According to central bank data, the daily average surplus for the week ending April 25 stood at 80,900 crore rupees, a significant decrease from the previous week's 1.78 trillion rupees.

(KNN Bureau)

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