RBI to buyback government securities worth ₹30,000cr on September 3
What's the story
The Reserve Bank of India (RBI) has announced a buyback of government securities worth ₹30,000 crore on September 3. The auction will be conducted on the RBI's E-Kuber platform between 10:30am and 11:30am. This move is aimed at managing the surplus liquidity in the banking system. The central bank has also been conducting Variable Rate Reverse Repo (VRRR) auctions to absorb excess liquidity.
Auction details
Eligible securities for buyback
The securities eligible for buyback include 7.33% GS 2026, 5.74% GS 2026, 8.15% GS 2026, and 8.24% GS 2027.
The RBI has not specified any individual amount for these securities within the overall limit of ₹30,000 crore.
The auction will be conducted using multiple price methods on September 3.
Liquidity management
VRRR auctions conducted in August
The RBI's decision to conduct the buyback comes as the banking system is witnessing a huge surplus of liquidity.
To tackle this, the central bank has been conducting VRRR auctions so far in August.
So far, 21 such auctions have been conducted in a bid to remove excess surplus liquidity from the banking system and align overnight money market rates close to the repo rate.