In anticipation of the Diwali festival, the Reserve Bank announced on Tuesday that it would inject 12,000 crores of rupees into the system by buying government securities on November 1. Last week, the central bank announced government securities as it appears to meet the demand for funds for the holiday season.
"Based on an assessment of existing liquidity conditions as well as sustainable liquidity requirements, the RBI has decided to proceed with the purchase of the following public securities in the course of trading operations." open market for a total amount of Rs 120 billion on November 1, 2018 (Thursday) … ", he said in a statement.
Eligible participants must submit their bids in electronic format by November 1st on the Reserve Bank of India's (E-Kuber) Core Banking Solution System. The result of the auction will be announced on the same day and the payment made to the selected participants will be made on the following day.
The RBI had previously indicated that the liquidity of the system would become negative in the second half of 2018-2019 and that changes in the liquidity situation would determine the choice of instruments for the transitional and sustainable management of liquidity.