TMI BlogImpact of Corona Virus – More Open Market Operations by RBIX X X X Extracts X X X X X X X X Extracts X X X X ..... Impact of Corona Virus – More Open Market Operations by RBI - By: - Prasanna CP - Corporate Laws / IBC / SEBI - Dated:- 23-3-2020 - - What are Open Market Operations (OMOs)? With an objective to adjust rupee liquidity conditions in the market, OMOs are conducted by the Reverse Bank of India (RBI) by way of sale and purchase of Government Securities (G-Secs). When the RBI feels that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s excess liquidity in the market, it resorts to sale of G-Secs thereby sucking out the excess rupee liquidity. Similarly, when the liquidity conditions are tight, RBI may buy G-Secs from the market, thereby pumping more liquidity into the market. Process of OMOs: First of all, the G-Secs are issued through auctions conducted by the RBI. Auctions are conducted on the electronic platform calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the E-Kuber , the Core Banking Solution (CBS) platform of RBI . The RBI, in consultation with the Government of India, issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the range of the tenor of securities and the period during which auctions will be held. The G-Secs can be held either in physical form (in the form of stock certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or in Demat form (in electronic form). The public debt office (PDO) of RBI , acts as the registry and central depository for G-Secs. It is mandatory for all the RBI regulated entities to hold and transact in G-Secs only in dematerialized subsidiary general ledger or SGL form. Recent OMOs announced and conducted by RBI: With the increase in level of pandemic risks due to Covid-19 and ec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onomic slowdown, in order to ensure that all market segments remain with adequate liquidity and stability, the RBI upon review of the current liquidity and financial crisis across the nation decided to carry out OMOs by way of purchase of G-Secs through a multi-security auction using multiple price method. Date of OMOs - purchase Aggregate amount in crores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March 20, 2020 10,000.00 March 24, 2020 15,000.00 March 30, 2020 15,000.00 The RBI received positive responses for the OMOs conducted on March 20,2020. RBI also taken other measu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res such as dollar-rupee swaps and Long Term Repo Operations (LTROs) to counter liquidity crisis. References: Times of India Business news RBI press release: 2019-2020/2082 and 2019-2020/2093 - Reply By mohan chandra as = This could get changed, as the coronavirus is more rapidly increasing with all the new cases so does the lockdown. Dated: 2-4-2020 - Scholarly articles for kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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