RBI to buy ₹1 lakh crore worth government bonds
The Reserve Bank of India (RBI) is set to buy ₹1 lakh crore worth of government bonds this March, splitting the amount across two big auctions on March 9 and March 13.
It's a move designed to make sure there's enough cash flowing through banks and businesses, especially as things have been a bit tight lately.
How the bidding process works
RBI will pick up seven types of government securities, with maturity dates stretching from 2030 all the way to 2053.
If you're curious about how this works: eligible participants must submit bids electronically on the E-Kuber system between 9:30am and 10:30am on March 9, and successful deals will be settled by 12pm the next day.
It's all part of RBI's ongoing effort to keep money moving smoothly in the economy.
Why is RBI taking these steps?
RBI has ramped up these bond buys because foreign money has been leaving India, and US dollar sales have drained some liquidity.
These steps have helped stabilize bond yields and borrowing costs in the broader market.
On top of these auctions, RBI has also done currency swaps and repo operations worth thousands of crores recently, all aimed at supporting India's massive borrowing plans.