RBI to sell Rs 25,000 crore in government bonds in another tranche of liquidity-drain measures

Mumbai (Maharashtra) [India], September 23 (ANI): The Reserve Bank of India (RBI) will sell another Rs 25,000 crore of government securities on September 28 in the final leg of its Rs 1 lakh crore OMO sale programme, as the central bank continues to absorb surplus liquidity from the banking system following large foreign currency inflows, particularly through FCNR(B) deposits.
“The Reserve Bank will be conducting OMO sale auction of Government of India securities for an aggregate amount of Rs 25,000 crore on September 28, 2026,” the central bank said in a press release on Wednesday.
The central bank had scheduled the bond sales in three tranches – Rs 50,000 crore on September 17 and Rs 25,000 crore each on September 21 and September 28.
Through an OMO sale, the RBI sells government bonds to banks and other market participants. The money paid for these securities moves out of the banking system and to the RBI, helping reduce surplus rupee liquidity.
The liquidity surplus has increased in recent months following strong foreign currency inflows under the RBI's special dollar-rupee swap facility.
Latest RBI data showed that total foreign exchange inflows under the facility stood at USD 143.596 billion, with Foreign Currency Non-Resident (Bank), or FCNR(B), deposits alone accounting for USD 132.980 billion. Overseas Foreign Currency Borrowings contributed USD 5.320 billion, while External Commercial Borrowings accounted for another USD 5.296 billion.
Under the swap facility, banks bring foreign currency to the RBI and receive rupees in return. The large inflows therefore add rupee liquidity to the banking system. The RBI has been using liquidity-management tools, including OMO sales, to absorb part of this surplus.
For the September 28 auction, the RBI will offer six government securities with maturities ranging from March 2029 to August 2032. There is no security-wise notified amount, and the central bank will decide the amount to be sold under individual securities based on bids received.
The RBI said the auction results will be announced on September 28, while successful participants will have to ensure availability of funds by noon on September 29. (ANI)