As the liquidity deficit continues, RBI OMOs have extended Rs. 50,000 crore is injected

Reserve Bank of India on Thursday through open market operation Rs. 50000 crore was injected while it received Rs. 1.39 lakh crore bid was received.

Earlier this month the central bank announced Rs. 1 lakh crore was the second phase of OMO.

Incidentally, despite the central bank’s efforts to inject sustainable liquidity into the system through open market purchases of government securities and a $5 billion dollar-rupee swap deal in the past few days, inter-bank liquidity remained in deficit for the past two days due to advance tax outflows.

As of Wednesday, the system’s losses stood at Rs. 68.586 crore was seen.

At Thursday’s OMO, the RBI bought stocks for seven dates – 6.75% 2029, 6.10% 2031, 6.54% 2032, 7.18% 2033, 6.33% 20235, 7.23% 2039 and 7.054% paper.

Rupee closes higher

The rupee closed up 14 paise at 90.24 per dollar on Thursday, extending its relative gains for the second day in a row.

Market watchers said inflows of corporate dollars and softening global commodity prices have helped the Indian currency. It retreated on Wednesday on possible central bank intervention after breaching the 91-mark for the first time a day earlier.

“This revival pace reflects a favorable shift in supply-side dynamics, allowing the local currency to benefit,” said HDFC Securities analyst Dilip Parmar. “However, the market remains in a state of flux as investors focus on three key central bank policy announcements and the upcoming release of US inflation data,” he added.