In a move to maintain liquidity and support the financial system, the Reserve Bank of India (RBI) has announced an additional ₹40,000 crore open market operation (OMO) purchase scheduled for April 17. This step adds to its ongoing ₹80,000 crore OMO programme, which is being rolled out in four ₹20,000 crore tranches throughout April.

To further ease liquidity pressures, the central bank will simultaneously conduct a 43-day variable rate repo (VRR) auction, aiming to inject ₹1.5 trillion into the banking ecosystem. These initiatives reflect the RBI’s broader strategy to provide consistent surplus liquidity, especially after the recent monetary policy stance signaling support for rate transmission.

So far, the RBI has already pumped ₹2.9 trillion through OMOs and an additional ₹2 trillion via VRR auctions. Despite these interventions, the banking system continues to operate with a surplus liquidity of ₹1.8 trillion, as per the latest RBI data.

Market experts view this liquidity support as a positive signal for the bond markets. With global uncertainties keeping U.S. bond yields volatile, the RBI’s measures are expected to help stabilize domestic yields. The yield on the 10-year government bond, currently at 6.44%, is at a three-year low and could decline further to 6.25% by June-end.

In essence, the RBI is not only infusing capital but also reinforcing market confidence. Its actions underscore a proactive approach to monetary easing-ensuring smoother policy transmission while shielding the economy from global shocks.