The Reserve Bank of India (RBI) has announced its plan to conduct an Open Market Operation (OMO) on 17th April 2025 purchasing government securities worth Rs 40,000 crore. This will be the third such OMO in the current fiscal year, following earlier purchases of Rs 20,000 crore each on 3rd April and 8th April. The move forms part of the RBI’s broader strategy to inject liquidity equivalent to 1 per cent of Net Demand and Time Liabilities (NDTL)—estimated at Rs 250 lakh crore—into the banking system, targeting a total infusion of Rs 2.5 lakh crore.
Since January 2025, the RBI has already infused nearly Rs 7 lakh crore into the system through a series of liquidity-boosting operations. In addition to the OMO, the central bank will also conduct a 43-day variable rate repo auction on 17th April, infusing a further Rs 1.5 trillion to maintain a surplus liquidity position—especially critical during monthly GST outflows, which can temporarily strain liquidity levels.
These initiatives are key to transmitting monetary policy effectively into the real economy. By ensuring that banks have access to adequate funds, the RBI aims to facilitate lower interest rates, encourage borrowing and consumption and provide a buffer during economic uncertainties and volatile global conditions.
Reflecting the impact of these liquidity measures, the 10-year government bond yield has fallen to a three-year low of 6.44 per cent, and market experts anticipate a further decline to 6.25 per cent by June, indicating growing investor confidence in RBI’s stabilising efforts.
In line with evolving market needs, the RBI has also shifted its liquidity measurement framework—from focusing solely on durable liquidity to emphasising system liquidity, which centers on available banking system funds while excluding idle government cash balances.
The RBI’s decision to inject Rs 40,000 crore is a strong signal of its commitment to financial stability, economic support and enhanced monetary policy transmission, reinforcing confidence across financial markets and lending institutions.
