The Reserve Bank of India (RBI) has decided to conduct four open market operation (OMO) purchase auctions of Government Securities (G-Secs) aggregating ₹80,000 crore this month even as the system liquidity has turned into a surplus.
On a review of current and evolving liquidity conditions, the Reserve Bank has decided to conduct OMO purchase auctions of G-Secs in four tranches of ₹20,000 crore each to be held on April 03, 2025, April 08, 2025, April 22, 2025, and April 29, 2025.
Venkatakrishnan Srinivasan, Founder and Managing Partner, Rockfort Fincap LLP, said the liquidity surplus of about ₹90,000 crore as on March 30, 2025 may be due to Banks bulking up on certificate of deposits and short-term bulk deposits in the run up to the financial year end.
He expects the surplus to turn into deficit in a few days. Hence, the OMO purchase auction announcement by the central bank.
Madhavi Arora, Chief Economist, Emkay Global Financial Services, said: “The OMO spree doesn’t seem to end…We’ve ended FY25 with a banking liquidity surplus (₹89,400 crore vs deficit of ₹2.4 lakh crore last week/March average deficit of ₹1.3 lakh crore).
RBI liquidity infusion
“Massive RBI liquidity infusion (₹3.2 lakh crore durable addition) + month/ year-end government spending and recent FPI Inflows have helped too.”
She assessed that going forward, Q1FY26 is poised for a very comfortable liquidity, led by estimated ₹2.8-3 lakh crore RBI dividend by end-May, given massive profits made on foreign exchange gross sales of (estimated) nearly $360-375 billion plus budgeted RBI surplus is only ₹2.2 lakh crore.
Further, there is a sharp seasonal moderation in currency in circulation (Q-o-Q flat growth expected after massive leakage of ₹1.7 lakh crore last quarter).
