ENA Economy 2025-05-07 13:56:14 <p><span style="font-size:14px"><strong>New Delhi, May 7 (KNN) </strong>The Reserve Bank of India (RBI) witnessed exceptional demand in its latest open market operation (OMO) purchase, with bids from banks totalling over Rs 1.32 lakh crore against the notified amount of Rs 50,000 crore.</span></p> <p><span style="font-size:14px">This robust response, more than twice the offered amount, underscores the banking sector's strong appetite for liquidity enhancement measures.</span></p> <p><span style="font-size:14px">The central bank has scheduled three additional OMO auctions, each valued at Rs 25,000 crore, to be conducted on May 9, May 15, and May 19.</span></p> <p><span style="font-size:14px">Since January 30, the RBI has injected Rs 3.24 lakh crore into the banking system through OMO purchases. These interventions were initiated to counter a severe liquidity crunch that developed in mid-January, primarily resulting from the central bank's aggressive foreign exchange market operations.</span></p> <p><span style="font-size:14px">The liquidity deficit had reached critical levels, exceeding Rs 3 lakh crore and peaking at Rs 3.15 lakh crore on January 11.</span></p> <p><span style="font-size:14px">The RBI's comprehensive approach to addressing the liquidity constraints has shown positive results, with the banking system transitioning to a surplus position from April.</span></p> <p><span style="font-size:14px">Recent data indicates liquidity surpluses of approximately Rs 1.5 lakh crore on Friday and Rs 1.2 lakh crore on Monday.</span></p> <p><span style="font-size:14px">To achieve this turnaround, the central bank implemented various measures, including cash reserve ratio (CRR) reduction, daily variable rate repo (VRR) auctions, long-term repo operations, forex swaps, and strategic OMO purchases.</span></p> <p><span style="font-size:14px">While the outlook for durable liquidity appears favourable for the coming months, the report cautions that banking system liquidity may experience fluctuations depending on government spending patterns and implementation pace.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 42000 https://knnindia.co.in/news/newsdetails/economy/overwhelming-response-to-rbis-open-market-operation-signals-improved-liquidity-management 2025-05-07 13:56:14 knnindia.co.in