With the concerns growing on the Indian financial sector, the central banker of India has announced that it will inject Rs 36,000 crore liquidity into the system.
The Reserve Bank of India said that it will be done through purchase of government bonds in October to meet the festival season demand for funds.
It need be mentioned that the auctions to purchase government bonds as part of the Open Market Operations (OMO) to manage liquidity in the system will be conducted in the second, third and fourth week of October.
The RBI in a press release pointed out that 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 OMOs for an aggregate amount of Rs 360 billion in the month of October.
The auction dates and the government securities to be purchased in respective auctions would be communicated in due course.>