Mumbai, Dec 18 (IANS) The Reserve Bank of India (RBI) on Tuesday said on review of the evolving liquidity conditions, it has decided to scale up the amounts to be purchased in the remaining two OMO (Open Market Operation) auctions scheduled in December 2018 to Rs 15,000 each.
"Consequently, the total injection of durable liquidity for the month of December 2018 would amount to Rs 500 billion (Rs 50,000 crore)," the Central bank said in a statement.
The decision comes amid concerns of a liquidity crisis in the economy after the default by IL&FS Group companies and government's calls for more liquidity infusion.
Additionally, the RBI said it will inject Rs 50,000 crore into the market by purchasing government securities in January 2019.
"Further, based on an assessment of the durable liquidity needs going forward, the RBI has decided to conduct purchase of government securities under OMOs for an aggregate amount of Rs 500 billion in the month of January 2019," the statement said.
"The operations will be conducted through five auctions of Rs 100 billion each."
According to the central bank, liquidity conditions will be monitored and depending on the assessment, similar quantum of OMO purchases might be considered until end of March 2019.
"The exact calibration of the quantum of OMO would depend on sustained changes in the behaviour of currency in circulation, the magnitude of sterilisation operations for RBI's forex operations and other relevant factors," the statement added.
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