Business

Ahead Of Festive Season, RBI To Infuse Rs 36,000 Crore Into Money Markets In October

JAVED SAIFI | 0
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| October 1 , 2018 , 14:07 IST

Maintaining the assurance to meet the liquidity requirements of the system, the Reserve Bank of India announced on Monday to infuse Rs 36,000 crore ($4.95 billion) into the money markets in October ahead of the festive season.

In order to infuse Rs 36,000 crore into money markets, the RBI has decided to conduct purchase of government securities under Open Market Operations (OMOs) in the month of October 2018.

In a press statement RBI said, “Based on an assessment of the durable liquidity needs going forward and the seasonal growth in currency in circulation observed in build-up to the festive season, RBI has decided to conduct purchase of government securities under Open Market Operations (OMOs) for an aggregate amount of Rs 360 billion in the month of October 2018.”

Also Read: Fiscal Deficit Is Under Control As Govt Cuts Gross Borrowings By Rs 70,000 Crore

“The auctions would be conducted during the 2nd, 3rd and 4th week of October,” it added.

The RBI took the decision to infuse Rs 36,000 crore into the money market as it had assured that it stands ready to meet the liquidity requirements of the system.

According to economists, it is a positive sign to the market that chances of the fiscal deficit by the government are less as on Sunday Department of Economic Affairs Secretary Subhash Chandra Garg had also announced a reduction of borrowings by Rs 70,000 crore at Rs 2.47 lakh crore for the October-March period.