The RBI purchased Rs 5,000 crore from the 6.79 2034 paper at 6.67%, Rs 6,520 crore from the 7.18 2037 paper at 6.85%, Rs 4,125 crore from the 7.10 2034 paper at 6.74% and Rs 4,375 crore from the 7.18 2033 paper at 6.77%
Market participants said that out of all the papers, one paper – the 10-year 6.79 2024 paper – was accepted at a premium to the market price, hence making it more expensive for the RBI. The other papers were accepted at a discount to the market price. Yields on the 10-year benchmark government security closed at 6.68% on Thursday.
“By doing a mix of liquid paper at a premium to the market and illiquid papers at a discount to the market, RBI was able to manage market sentiments. The RBI accepted some amount in the 10-year paper at a price higher than the secondary market at the time. This created a balance in the market sentiment,” said Vijay Sharma, senior executive vice president at PNB Gilts.
The RBI will conduct its second measure to infuse liquidity on Friday, by conducting a dollar-rupee buy/sell swap of $5 billion for a tenure of six months. Another Rs 20,000 crore OMO purchase auction will be held on February 13
System liquidity has continuously been in deficit since mid-December 2024 and the daily average deficit for January stood at Rs 2.03 lakh crore.
