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RBI announces OMO Purchase of Government Securities worth Rs.1,25,000 [Check Dates]
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After carefully looking at the current and changing money (liquidity) situation in the market, the Reserve Bank of India (RBI) has decided to buy Government of India bonds through a method called OMO (Open Market Operations).
They will buy a total of ₹1,25,000 crore worth of government bonds in four parts on the following dates:
| S. No. | Auction Date | Amount (in ₹ crore) |
|---|---|---|
| 1 | May 6, 2025 | 50,000 |
| 2 | May 9, 2025 | 25,000 |
| 3 | May 15, 2025 | 25,000 |
| 4 | May 19, 2025 | 25,000 |
What this means:
- RBI is planning to inject money into the economy by buying government bonds from banks and financial institutions.
- This process increases liquidity — meaning banks will have more money available to lend or invest.
Additional Points:
- Before each auction, RBI will give detailed guidelines separately for how that particular operation will be conducted.
- RBI will also keep a close watch on how money flow and market conditions change.
- If needed, RBI will take further steps to ensure smooth money availability without too much fluctuation.
What is OMO?
OMO stands for Open Market Operations.
- It means the Reserve Bank of India (RBI) buys or sells government securities (like government bonds) in the open market.
- The main goal is to control the money supply (liquidity) in the economy.
There are two types of OMO:
- OMO Purchase (RBI buys government securities) — to inject money into the system (increase liquidity).
- OMO Sale (RBI sells government securities) — to absorb money from the system (reduce liquidity).
Why is RBI purchasing government securities?
When RBI buys government securities:
- It gives money to banks and financial institutions (because they sell bonds to RBI).
- This increases liquidity — meaning banks have more cash to lend to businesses, individuals, and invest elsewhere.
- Cheaper loans: With more money in the system, interest rates can fall, making loans cheaper for the public and businesses.
- Boosts economic activity: Easier access to loans encourages spending and investment, helping the economy grow.
In simple words:
- RBI is buying government securities because it wants to put more money into the economy.
- This helps banks lend more, businesses grow, and people borrow easily, especially when there is less money flow (tight liquidity) in the market.
