RBI to conduct second round of government bonds worth Rs10,000 crores on Monday

The Reserve Bank of India (RBI) has decided to conduct simultaneous purchase and sale of government securities (GSec ) through Open Market Operations (OMO) for Rs10,000 crores each on Monday, December 30, 2019, following a review of liquidity situation.

"On a review of the current liquidity and market situation and an assessment of the evolving financial conditions, the Reserve Bank has decided to conduct one more simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs10,000 crores each on December 30, 2019 (Monday)", the central bank said in a statement released on Thursday.

The central bank, earlier this week on December 23, 2019, also conducted a similar OMO and purchased securities worth Rs10,000 crore and sold worth Rs6,825 crore.

Such exercises are conducted by the central bank when the proceeds from the sale of short-term securities are used to buy long-term government bonds or securities in a bid to bring down interest rates on long-term securities.

The eligible participants can submit their bids/offer in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10.30 a.m. and 12.00 noon on Monday.

The result for the same will be announced on Monday itself and successful participants will have to ensure the availability of funds/securities in their Current account/SGL account, as the case may be, by noon on December 31, 2019, the RBI said while announcing the special OMO.

The RBI further said it reserves the right to accept or reject any or all the bids or offers either wholly or partially without assigning any reasons.