Explained | Why RBI is buying bonds worth Rs 20,000 crore and other questions answered
The RBI needs to keep the bond market happy and yields within a limit so that the government’s Rs 12.06 lakh crore borrowing plan has a smooth run. February 08, 2021 / 06:57 PM IST
The Reserve Bank of India will on February 10 purchase government securities under an open market operation (OMO) for Rs 20,000 crore, the central bank said on February 8 as it looked to calm the bond market.
The announcement saw the bond yields that have jumped in the last few days ease to 6.03 percent from 6.07 percent on February 8.
The banking regulator also said it was committed to ensuring ample liquidity in the system to foster congenial financial conditions. The bank needs to keep the yields in check, so that the government’s borrowing plan can have a smooth going.