RBI announces OMO Purchase of Government Securities worth Rs.1,25,000 [Check Dates]

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:

1. OMO Purchase (RBI buys government securities) — to inject money into the system (increase liquidity).
2. 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.